I first invested in Zoopla in July 2007. At the time, a mere £500,000 to get the company going and back Simon Kain and Alex Chesterman in improving the real estate experience.
Last week, almost exactly 7 years after this first investment, Zoopla released its last set of numbers: 40 million monthly visits, six-months revenues of £38.8 million and a profit margin that is flirting with 50%.
As I left the last board meeting, I marvelled about how this management team had taken the business so far and so fast; this is not so much as statement about the top line as a statement about having built a sustainable, robust, profitable and extremely well run machine in such an incredibly capital efficient manner (the company only ever took cash from Atlas and Octopus and a few angels, and not that much of it).
Zoopla was launched in 2008 with the simple goal of trying to improve transparency and efficiency in the residential property market, helping all actors be smarter and better educated about their property decisions and helping market professionals by providing them with high quality clients and enabling ongoing relationships with those clients.
When I look back, 6 years later, we still have the exact same objective. We still use the KPI set that Alex and I designed 5 years ago. We will have the same tech team, the same tech stack, the same CTO.
We started with a simple mission and focused relentlessly on the task. Shifts in strategy were subtle and thoughtful. The brand evolved slowly and continuously without ever straying from the original promise.
As a result, everything this company does is tightly executed, with absolute focus on the mission and a culture of speed. For example, when we acquired PropertyFinder in 2009, Simon and Alex did not spend any time trying to integrate disparate tech platforms: they migrated 100% of the data onto our systems and the absorption of that larger business was fully complete in a mere 90 days.
Zoopla was never dramatic, but it was and is always dramatically fast in its execution.
The credit lies with Alex and Simon and the team they assembled; I just had to get out of the way and be there with capital when they needed it !
Lessons of success cannot be applied from one company to the next, but here are some guiding principles of why Alex has been so successful:
- Focus only on the mission: you won’t see Mr Chesterman mentoring at Seedcamp or parading at tech conferences, unless he is receiving an award. He’s busy building Zoopla. He’s been busy building Zoopla for 7 years.
- Fast and steady decision making: If your toughest job as an entrepreneur is to make decisions under conditions of uncertainty, then this team should be a model. By biasing towards fast action the team has been able to out-execute everyone else in the market over the span of several years.
- Iterate strategy slowly and carefully, execute tactics brutally fast: I think that we spent enough quality time in this business every year re-assessing our overall strategy carefully and with an open mind but not putting any pressure our ourselves to change it. At the same time, when a consolidation opportunity arose or a new marketing channel emerge, the team was on it like a plague, mobilising any and all resources necessary to capitalise on these extremely fast.
- Always set (achievable) stretch goals. Csikszentmihalyi would be happy with a company like Zoopla. By always setting slightly unreasonable goals and systematically hitting them, this is a culture where important get done fast and reliably, where a culture of delivery permeates the entire organisation, and where there is extreme confidence that seemingly unreasonable goals can indeed be achieved.
- Keep it Simple. I remember Alex saying a good company should be run on 6 numbers. Whilst our KPI sheet grew to incorporate a few more than that, the company never erred from keeping its operations and its mission simple. Complexity kills, and Zoopla is a shining example of doing a few things that matter extremely well.
- Respect the tech. I always get concerned when I see a large commerce or digital media player without a strong tech component. Zoopla always understood the value of good design and of a strong and scalable backend. We can say without a shadow of a doubt that the engineering strength of Zoopla is a great part of why we are where we are today. It is my belief we outperform everyone on SEO, traffic generation, lead transformation and mobile. We have built most of our systems internally and as a result were able to be nimble and integrate our acquisitions extremely fast.
I realize none of these are groundbreaking insights. But maybe that is exactly the point. We chose a big market and a simple mission and executed relentlessly. When opportunity knocked (such as with PropertyFinder and our other acquisitions), we took it.
In the final analysis, it makes no sense for consumers to be presented with a plethora of property sites with incomplete inventory. In 2012, capitalising on years of fast consumer growth and what was simply a better product, we took and integrated the Digital Property Group and in the process gained a great new shareholder in the form of DMGT; a game changing move.
I am proud and at the same time humbled to have worked alongside these guys for seven years. When you invest in real pros, all you have to do is sit back and watch !