However, in one of the major news stories of last year – which seemed to creep up out of nowhere – the Bruce brothers announced their return to the property industry with a charity initiative (Agents Together) and a new portal (later to be known as Boomin). Since then, Boomin has arguably shaken up the industry more than anything else since Purplebricks itself and the launch of OnTheMarket (OTM) back in 2014-15.
With its financial clout and highly effective PR machine, it has knocked the other challenger portals out of the water and has started to take the fight to the established big three of Rightmove, Zoopla and OTM – albeit it’s not without its strong critics.
Without further ado…
There’s a sceptical ‘anti-Purplebricks’ brigade - what are you doing to persuade them to get on board?
Agents have always been a very competitive group of people and therefore I totally understand that there will be some people who will judge us entirely on the past and on what they read.
The vast majority of agents have been very open-minded, engaging, respectfully challenging and willing to get to know us before making a firm judgement. I have really enjoyed getting to know more and more agents. It really excites us to support them as much as we can with Boomin.
It is fair to say that when you are launching something in relatively unchartered waters, at 100 miles an hour, you will make mistakes, not judge everything right all of the time and as a result upset people along the way.
We have certainly learned a lot during that time and are better equipped now than when we started the Purplebricks journey nine years ago. We want to engage with and get to know as many agents as possible and develop an open and trusting relationship. We recognise that it will take time and as a result are providing the Boomin platform free of cost and obligation for the whole of 2021, so they can try it out, be confident that will always support agents and be at the forefront of innovation.
Boomin relies heavily on cross-selling and referral fees…just as the latter are in the spotlight and government wants to make them far more transparent. How will the business model work if these fees are made more public or even banned outright?
We will not seek to compete with agents, so in most instances it will be their products and services being presented to visitors and in all cases in the full property advert and in their customers’ Property Hub.
There will therefore be no referral arrangement or disclosure requirement. When it comes to the Property Playground, there is no referral from agents in particular with reference to a customer purchasing a product or service.
All customers in the Property Playground are registered customers of Boomin and will purchase products and services from partner retailers on the Boomin platform. Whilst we do not consider that there will be an outright ban, we will comply with any legal obligations should they be introduced.
You’re an experienced high street and online estate agent. If you were running an agency now, what portals would you be on and why?
I can fully understand why agents are making the portal choices they make given the absence of meaningful competition. If I was an agent now, I would be worried about my costs as we enter what is likely to be another highly uncertain year for the housing market.
I would be looking for value and cost certainty, as well as a platform that was going to have a meaningful impact on the productivity and profitability of my business. As an independent agent seeking to grow my business, I would be concerned by continued high pricing that is reaching unaffordable levels and the need for a credible alternative to the status quo to give agents a greater influence.
It is for these reasons that we are launching Boomin; to provide agents with real choice and exceptional value. No other portal aims to return more money to agents through ancillary income than they pay over in fees.
What’s your long-term game plan? To beat Rightmove? To float? Both?
We aim to build Boomin into a household name in the shortest amount of time possible to provide meaningful competition in the portal space. We will achieve this with an impactful marketing strategy and by giving visitors and agents a new, interesting and exceptional experience.
We want agents to know that when they are looking at their advertising line-up that there is a credible alternative and a real choice to be made. We want to earn the trust of agents and get them influencing and being at the forefront of future experiences for them and their customers.
The question of whether we aim to IPO (Initial public offering) is often raised by some in commentary on trade stories as if it is a bad thing or an end game, when in fact neither are always true. In the past [with Purplebricks], an IPO provided additional profile and huge access to capital, both of which were incredibly helpful to expand.
But we have given zero consideration to an IPO, although it would make no sense to rule anything out as never at such an early stage of the development of the business.
Some say Agents Together was just a PR-friendly way of buttering up agents before you returned with Boomin - what would you say to those criticisms?
I think this is a minority held view. Any of the hundreds of agents that have received support through the organisation or had any dealings with them, will fully understand that this is a proper not-for- profit organisation, run by a fantastic and dedicated team, led by Sarah Edmundson.
The timing of Agents Together came about because of Covid and the huge impact that this was having on agencies and agents up and down the country both in terms of their mental health and business success. We have been overwhelmed by the engagement, input, support and results we have been getting from everyone.
Kenny and I have a long history in the estate agency sector – my brother even more than me - and during those many years we have met thousands of amazing people in the industry. The founding and financial backing for Agents Together was born out of a genuine desire to do some good for others and to put something back into our industry.
Agents Together will prove to be one of our proudest achievements and those who engage with it will know how hard we all work to make a difference.
When you look back on your Purplebricks journey, what are the highlights and lowlights? Did you have regrets about the way it all ended?
I have been really fortunate in my career to date, with many highlights, though there is never the time to pause, reflect and enjoy them. As soon as you reach one goal, it is always moving straight on to the next challenge, the next objective; but I need that sense of advancing, building, growing.
Anyone around me will tell you that I am not good at doing nothing. Launching Purplebricks was a highlight, the culmination of everyone’s hard work for some two years before launch. My brother and I had essentially bet everything we had on this and so it had to succeed.
I am not one for regrets or for looking back. It ended, I sold all of my shares pretty much straight away so I could do something else and started to plan and invest in Boomin. That doesn’t mean I haven’t learned an enormous amount. I have.
Having big ambitions doesn’t mean you are not human, that you don’t make mistakes, make bad calls, sometimes see things afterwards rather than before and find yourself behind the wheel of a Formula One car going faster than you expected and learning and gaining experiences as you see the twists and turns in the road.
Nine years since the start of that journey is a hell of a long time. I have learned a lot about myself and everything else that will no doubt help the outcomes of the future.
What made you decide to launch Purplebricks in the first place? And, similarly, what was the trigger for Boomin?
Having not been an estate agent and becoming the CEO of a large estate agency business enabled me to stand back and look at things in a different way, but with the comfort of having a brother that knew agency inside out and who would challenge me.
Purplebricks was created because there was a lack of technology to give customers and agents a better experience and we were noticeably falling behind other industries.
Purplebricks has in my mind helped the industry become sharper, although I think we still have some way to go with technology. In all the years that I was spending millions annually on property portals I, like a lot of agents I suspect, would stop for a short period of reflection when that call came in to set up a meeting with an Account Director and ask myself what has changed, how have they innovated to support me and our business, how have they invested in us to make that inevitable price increase seem fair. Each time I got the same speech and reached the same conclusions, felt the same way and just went back into the fast lane feeling unhappy and dissatisfied.
I felt powerless to do anything that would make a jot of difference. But when the gig came to an end and I went from the fast lane to being parked up at the side of the road it had become more and more clear to me that there has to be a credible alternative that empowers agents and a portal to work together in a win/win relationship.
As listing sites, the incumbents do a decent job, but technology over the last twenty years has advanced dramatically, yet the portal proposition and customer experience has barely changed, while fees charged to most agents have risen dramatically.
I am often challenged and questioned on whether the market really needs a fourth portal. To those people I would say where is the choice in the current offering? Where is the innovation? Where is the price competition?
The cold reality is that the status quo has not delivered a better experience, technological innovation or meaningful, real price competition. A market does not generally function properly where the leader enjoys a 76% profit margin year after year.
If you pay £3,000 per branch per month, the principle sum of £2,280 is profit. Apple’s margin is 21%, Amazon’s is 4.99%, Netflix’s is 12.28% and estate agency is generally 10-12%. In some ways the profit margin doesn’t matter if there is healthy and fair competition where everyone is investing in their customers and how they want to make them feel and think. But that is not the case here. Boomin will be relentless in this regard.
Purplebricks built its brand by criticising the fees charged by other estate agents. Where do you stand on estate agency fees now and do you sympathise with agents who are reluctant to sign up to Boomin due to your previous criticism of their business model?
Purplebricks was about giving customers an alternative option, a choice, and that is healthy for every market. Estate agency is not about advertising, the message nor indeed the price, it is about people and how they articulate their message, how they present themselves and how they care about the customer.
There is no other industry that demonstrates this more than estate agency where price alone has not provided anyone over the years with a meaningful and continuously growing market share. Customers have shown time and again that they will pay more to the person who fills them with the most confidence.
I have said many times, we didn’t always get things right and when running so fast you will trip up, fall over, get things wrong and therefore I do have some sympathy with agents who feel that way.
It is, however, up to us to demonstrate that we will always have their best interests running through the core of the Boomin business. 2021 will determine the future relationship between agents and property portals and that will almost certainly last for the next decade whatever the outcome.
Thanks for the very detailed answers, Michael. Next time I will be catching up with Belvoir’s Dorian Gonsalves, whose company enjoyed an impressive 2020 despite the challenges of the pandemic.
Nat Daniels is CEO of Angels Media, publishers of Estate Agent Today and Letting Agent Today. You can follow him on Twitter @NatDaniels. He also writes a regular column – Property Natter – which appears in the Weekend Features section every two weeks.