Russell Quirk former CEO of defunct online estate agency Emoov seems to suggest that online agency is a very good way to lose money.
In the first of a series of video interviews with property consultant Chris Watkins Quirk says that Emoov was “bleeding cash” at the rate of £800,000 a month towards the end – to the extent that fundraising efforts left senior staff with little time to actually run the business.
Quirk gives two main reasons for the seemingly insatiable cash demands of the online model. These are the need to hire a high calibre of senior personnel in order to convince investors. Also the high costs of making sales, commenting: “marketing is ridiculous across the online sector” with marketing spend being “obscene”.
He suggests that Purplebricks and other online agencies have fared better than Emoov as they were able to attract investors with deeper pockets, and also learn from Emoov’s mistakes.
Quirk’s interviews seem intended to help redeem his tarnished image following Emoov’s failure. Whether they will be effective remains to be seen. However, his comments confirm that one old business adage applies to online even more than it does to offline – if you hope to make a lot of money you must first start with even more.