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"I strongly believe that behind each frustration, stands a potentially great solution.” This statement by propertyfinder Group founder and CEO Michael Lahyani may seem rather simplistic, but the premise it puts forward is, in effect, a rather accurate summation of how this entrepreneur went about setting up (and succeeding with) his aforementioned online real estate classifieds enterprise. “Every business, and more importantly, [every] tech business starts by identifying an issue, a difficulty among end users or within businesses,” says Lahyani. “In 2004, when I first moved to Dubai and started looking for a home, my only option was Gulf News’ Classified section- pretty limited for a booming real estate market. There was a clear issue around consumers looking to rent or buy an apartment, and an obvious need for a search engine that allows you to find your apartment in a couple of clicks. The business was therefore focused around solving that pain initially.”
Lahyani started up his business in 2005 with the launch of a UAE-based property print magazine called Al Bab World, and in 2007, its online portal AlBabWorld.com had 51% of its stake bought by the News Corp Australia-owned, Melbourne-headquartered online real estate advertising company REA Group. This acquisition also marked the rebranding of the company as propertyfinder.ae, and the website continued to gain popularity as an easy and convenient way to look at real estate opportunities in the UAE. In 2010, while the market around them was dealing with the effects of the recession, Lahyani and co-founder Renan Bourdeau bought back REA Group’s stake in propertyfinder, and the company soon broke even. Shortly after, propertyfinder decided to grow beyond its UAE borders- 2012 saw its international operations begin in Qatar, and that was just the beginning of its expansion in the region. Today, propertyfinder Group operates in seven markets across the MENA (UAE, Qatar, Bahrain, Egypt, Saudi Arabia, Lebanon, Morocco), with its sites boasting of more than one million visits per month.
Of course, if those figures alone weren’t proof enough of its success as an enterprise, then take a look at propertyfinder Group’s US$200 million valuation earlier this year, following its raise of US$20 million in capital from Sweden-based Vostok New Ventures Ltd., which bought a 10% stake in the company. This raise is particularly significant not just because of its sheer size, but also for the reason that before it came through, propertyfinder Group had managed to grow through the years having raised only a comparatively low amount of funds. “We had our initial funding from the founding members in 2005, and in 2007, News Corp came in about $2 million, and later on in 2012, Beco [Capital] also injected around $2 million,” Lahyani reveals. “We got all the way to 2015 with relatively minimal funding, considering the overall valuation of the business, and we wanted to make sure that we would establish our clear leadership in all the markets we were undertaking, and therefore raising a significant amount was needful, in order to gear up for that domination phase.”
Vostok New Ventures’ interest in propertyfinder Group can also be seen as an indication of the transformation and evolution of the MENA entrepreneurial ecosystem, one that Lahyani has been a part of for more than 10 years now. “Three years ago, it was unthinkable that external investors would invest in tech companies in this part of the world,” Lahyani points out. “And when Vostok raised an interest in our business, we felt it was a real opportunity to bring in funding and a know-how to our part of the world. Vostok New Ventures’ funding is a perfect example of what we’ve become: a brand that grew beyond UAE’s borders. Dubai was previously known for being a land of opportunities. Any ideas to fill in the many market gaps were welcome. Today it has become a hub for innovation. Homegrown enterprises are burgeoning, and expanding regionally and sometimes globally. These [are] very exciting times for entrepreneurs!”
Now, it’s very easy to be bowled over by all of the obviously great things that are happening at propertyfinder Group these days, but one must bear in mind that all of this did not come easy- Lahyani and his team have had plenty of testing situations along the way, many of which may seem familiar to startups and entrepreneurs operating in the region even today. For instance, when Lahyani set up the business in Dubai in 2005, it might interest you to learn that he too was once vexed with deciding between choosing a local partner to start up the business, or go for a free zone set-up model. (Just FYI, he went for the latter option, as “it offered more flexibility.”) For the forward thinking among you, who feel that your awesome startup idea doesn’t have a receptive audience yet, know that there was once a time when Lahyani and his team found it difficult to convince stakeholders that there was a need for what propertyfinder offered. “The biggest difficulty we faced back in the early days was to convince real estate brokers that they needed a different source of leads for their deals, and that they had to be exposed to the internet,” Lahyani remembers. “It took many years before we convinced them, but ultimately, when big names started signing up, everyone else followed!”
As for funds when starting up, Lahyani dug deep into his own pockets to get his business off the ground- and he advises other entrepreneurs to follow his lead. “As an entrepreneur, putting your own funds in the beginning is a must if you want to remain a respectful shareholder across the journey,” he explains. “If your first dollars are raised from external investors, you will naturally suffer a large dilution from day one which you want to avoid by gathering money from your own savings or close family and friends. Getting the business off the ground with your own money is essential!”
The above examples are just a sampling of the difficulties Lahyani faced as an entrepreneur in the MENA region- a Google search on his name will showcase articles where he has talked about troubles with investors, competitors, and other such elements as he went about building propertyfinder Group. “The lifecycle of a startup is paved with unpredictable challenges, and in my experience, a successful team knows how to turn obstacles into opportunities,” Lahyani says. “That’s how we survived at propertyfinder. The initial business started 10 years ago. We came into a market quite early, way before customers and consumers were ready for our platform. We had to educate the market: agents about digital marketing, and consumers about online and mobile property search. That took quite some time. We were actually losing money during the first six years of the business, and only became profitable in 2011. It took a lot of focus, persistence and discipline. We are today in the consolidation phase. The market has now recognized us as the leading real estate portal in the Middle East. And this is what we are doing in every market: aiming at becoming the clear number one.”
As Lahyani sees it, there’s still ample room for propertyfinder Group’s further growth in the coming years, and the company’s offering will need to be continually improved and innovated upon for it to remain a leader in the marketplace. “Our aim at propertyfinder Group is to release consumers from the pain related to house hunting,” Lahyani says. “Our mission is clear: to shorten the path to property for our consumers. It’s an ambitious mission, because across the region, there are still a lot of hurdles, even in Dubai. As long as we can improve that process, then we can bring value to the end users, and therefore, to our customers, and deliver them leads.” As for the real estate sector itself, Lahyani remains quite excited about it- according to him, the industry continues to be a good place to start a business in this region. “The real estate space is an amazing space for entrepreneurs to enter, and there are a lot of more disruptions to come,” he says. “My prediction is that multiple players offering services in different niches will be disrupting the industry. Technology will play a major role in challenging ‘useless’ players. As a leader in our market, we want to see younger companies enter, and help us make the entire property buying and renting a smoother process.” And there you have it, folks: an open call from Lahyani for real estate-focused startups that can help better propertyfinder Group’s offerings- so, if you fit the bill: well then, carpe diem, ‘treps!
Michael Lahyani's tips for entrepreneurs
1. KNOW YOUR MARKET
“Put your head down into the business, and push through all the obstacles that are ahead of you, and make sure that the prize is big enough. The first question an investor will ask you about your project is: ‘What is the size of your market?’ So before starting, you need to know what the size of the market will be, and what are you going after.”
2. BUILD A TEAM THAT COMPENSATES FOR YOUR WEAKNESSES
“It is more important to know your weaknesses than your strengths. Surround yourself with people who have better skills in the areas where you are weak; look for complementarity [in] people when hiring.”
3. BE PERSISTENT
“Make sure you enjoy doing what you do every day, because it will take at least twice longer than you had expected, and you will need as much energy in the beginning, middle and ‘end’ -although there is no real end- of the journey.
4. DON’T BUILD TO EXIT
“Don’t build a business to sell it, because buyers don’t come when you need them. Build a business that can sustain booming markets, and ultimately, if your business is solid, you will find a solid acquirer.”
5. PROTECT YOUR RELATIONSHIPS
“Finally, my last advice would be to never burn bridges. Every relationship that you will think is not important today might be counting tomorrow. ‘What goes around comes around.’”