Charlie Bryant - CEO, Zoopla
There’s an old adage in digital classifieds that the first mover takes all and that the only way to unseat an incumbent is to wait for them to make a mistake. However, situations like that are pretty rare. Several businesses thought they'd seen this at the start of lockdown but, as we have seen repeatedly across multiple sectors since, the leader of the pack tends to benefit from customer inertia.
In real estate, in particular, buying can quickly turn into a stressful and uncertain process, with infinite risks such as knotweed, gazumping, gazundering, surveys, and chains. Given most people in every country are faced with buying or renting properties at some stage in their lives, there has to be a better way.
So believes a great friend of mine, Founders Keepers, and Founders Forum, Charlie Bryant. A visionary leader with a world-class grasp of data and insight and the advantages they leverage, Charlie has been at the helm of Zoopla since 2018, steering the ship as it looks to address some of these pain points and differentiate from the market leader. He recognises that having the best people is always what helps a company to get ahead and, even through the pandemic, the company hired nearly 450 new staff.
As Charlie shared with 25 CEOs and MDs from around the world at this recent Founders Keepers event, to successfully disrupt a dominant competitor, you have to deliver customers a superior experience with innovative, differentiated propositions. Some of his fascinating insights on how best to do that are summarised below.
Waiting for the incumbent leader to trip up is a waste of your time.
It certainly helps, but any CEO who sets their strategy on waiting for someone else to fail won’t hold their position for long.
The marketplace space has two masters - consumers and customers. In Zoopla’s case, the consumers are home movers and the customers are estate agents and housebuilders. Conventional wisdom has always dictated that marketplaces are winner-takes-all environments. They are spaces where the incumbent will have a material pricing premium compared to their primary challenger or number two, as well as a greater share of add-on product sales - advertising, for example.
To overcome this, market disruptors have to do something different. On the consumer side, you have to be able to provide something new, something unprecedented. You must strive to become a well-established brand and you want the market to think, “As part of my search, I need to go to X because they're going to give me a valuable experience.”
On the B2B side, the activities of the incumbent are very important. Some of the most famed examples of where a market leader has been unseated are when they’ve done something that alienated their business customers. In real estate, there have been a couple of examples - most notably in South Africa and Portugal - where, in both instances, the lead property platforms, most relied upon by estate agents, found themselves completely disconnected from their customer base, creating an opportunity for the competition to swoop in.
If you want to disrupt, you’ve got to hit both sides of the flywheel and service both the consumer and customer. It certainly helps if either side is disaffected by the incumbent, but there’s no guarantee of that. You need to be innovating and offering them something different.
When you’re offering a similar service to the incumbent, innovation is key to disrupting your market.
Every day, our lives are littered with choices of brands and suppliers that are doing things in a different way. Whether that's choosing which airline to fly with or which supermarket to shop with, we do it all day long. The chosen options tend to be the most convenient, the cheapest, the providers of superior service or the choice with the broadest offering.
If you and the incumbent are out there offering the same service, it’s going to be difficult to entice more consumers and leapfrog the competition. There are lots of examples of companies leveraging tech to improve and go beyond a long-established service offering, realigning the status quo. To me, that has been the beauty of the last 20 years. As consumers, we’ve lived through a period of huge change, and one largely enabled by evolving technology.
Consumer demands are changing. What was good for yesterday’s consumer is certainly not going to be appealing to tomorrow's. The up-and-coming generation has a different set of demands and values that impact how they interact with platforms. That provides a great opportunity to offer a service that is similar in principle, but personalised and much more attuned to consumer needs.
Appreciate how far you’ve come and then go beyond.
In the pre-digital age, when you wanted to buy or rent a house, your weekends were spent walking up and down the high street trying to charm every single agent so that when they had a gem of a property, they’d call you before the other 15 people on their waiting list.
This all changed in the early part of the millennium. You could now go on to a website and search by number of bedrooms, postcode, or price. However, the reality is property search has not moved on much in 20 years. It's still built around those same relatively basic search criteria.
Look at how the broader consumer experience has changed as a result of tech. Whether it’s deciding what groceries you’re going to buy over the weekend or what movie you're going to watch with your family - these are now highly personalised, guided processes based on algorithms that understand our tastes and habits as well as we do. They are much more reflective of what the provider knows about our habits, needs, requirements, and circumstances.
Of all sectors, the property market can surely apply these principles to what is, in most cases, the most important purchase a consumer will ever make.
Recognise those opportunities for innovation.
As I consider what consumers in the property space need, there are a few things missing. First of all, there's a massive opportunity to bring search into the 2020s with something significantly more personalised, that uses what we know about each individual consumer and their onsite behaviour - GDPR permitting of course - to show them better options.
For the vast majority of people in the UK, their home is not only their largest asset. Through their mortgage, it’s probably their largest liability.
Yet, there’s no single destination where homeowners can manage and find out everything they need to know about their current home or a home they might aspire to buy in the future. I don’t just mean when they are planning to move, buy or rent a new home, but on a constant basis - from utilities to local market economics - there’s no single source of market truth.
In the UK, the vast majority of homeowners will stay in their homes for 20 years or so. There are many points along that journey where they need information and guidance, but that isn't currently available all in one place - it’s a fragmented market. And that creates real opportunity.
Zoopla is poised to capitalise on market opportunities.
Moving forward, we plan to:
- Change the way people find property - using guidance and personalisation to take the stress and uncertainty out of home moving.
- Expand beyond search - homeowners need help throughout the entire lifecycle of ownership and/or occupancy.
- Digitise that lifecycle - joining up a disparate set of manual processes.
- Continue to build on our strong relationships with estate agents and deliver the market standard platforms on which they, as well as housebuilders and mortgage lenders and brokers, run their businesses.
At Zoopla, we always talk about home and not property for a good reason. We recognise that a home is much more than just an asset; it's somewhere we make memories with friends and family, raise children, and feel safe and secure.
Yes, it's a financial investment, but you also have to recognise the emotional attachment. Home moving is a careful balance of head and heart. We want to nurture that attachment throughout the property lifecycle and, ultimately, own the homeowner.
Stephen Rosenthal is a Partner at Founders Keepers and the facilitator of the CEO/MD Forum, a global virtual meeting for senior leaders of the world’s most dynamic businesses, across every asset class, sector, and geography.
If you would like to join the CEO/MD Forum or learn more, please don’t hesitate to contact Stephen on firstname.lastname@example.org or +44 7725 144 124.