Caan he fix it?

Aaron Turner claims to have attracted millionaire entrepreneur James Caan to his business, Look4aProperty, with a 10-line email on the advice of his mum who described Caan as the nicest judge on Dragons’ Den. Here, Caan talks to Clare Bettelley about his involvement and his pledge to kickstart the housing market .

The Negotiator : What attracted you to Look4aProperty?

James Caan: I was interested in the online business. I have a number of businesses that are online and real estate is an activity that’s very much part of the Hamilton Bradshaw [Caan’s private equity firm] family of investments. I typically like what I think is a good proposition in a market sector that I understand. But most importantly, I was quite impressed with Aaron, in terms of his passion for the business and his drive and motivation. I have a reputation for backing people who are passionate about what they do and I thought Aaron reflected that. Plus, I have a reputation of constantly talking about the importance of execution. Ideas are great, but success relies entirely on execution; the idea only represents 5% of a plan. Once an entrepreneur starts on their journey they very quickly realise that this isn’t as easy as they thought. 

TN: So, you immediately bought into the idea of Turner’s business?

JC: No, we didn’t immediately warm to the idea because it’s a crowded market with low margins and declining revenues and the housing market was on its knees. At that point in 2008 I think it really was the bottom of the cycle, but that’s we then thought that this is an opportunity where the only way for it is up.

TN: So, you think the market bottomed out last year?

JC: Yes, absolutely.

TN: Look4aProperty’s not exactly what you’d call a leading consumer portal, or indeed one that many agents have even heard of, so why your investment?

JC: Investing in the top 10 means that you already reached the point of valuation; for me it’s all about creating value. If I can take a business like Look4aProperty into the top 10, then there’s obviously a substantially greater upside.

TN: How does the Homebuyer Finance campaign fit into your long-term strategy of creating value, and why has it taken so long to come to market with an initiative given that you became chairman of the business in January?

JC: Whenever I get involved with a business, the objective is to consider what I can do to get it into its top 10 sector league. It’s about considering what our proposition is, what different ideas and initiatives we can create, and how we go to market. We’ve been working extensively with Aaron for a year to come up with creative and innovative solutions that we think will enable the business to really take a position.

TN: So, the Homebuyer Finance campaign is all about propelling Look4aProperty into and up the top 10 property portal league?

JC: Absolutely right.

TN: So, it’s more a means to an end that an end in itself?

JC: The proposition is very compelling. Kickstarting the housing market and making it easier for the consumer to get on the ladder of property is what it’s all about. In that journey, if you’re able to then attract those people via the website, it’s one of those classic situations; the consumer wins, the agent wins and the company wins.

TN: It’s difficult to see how one campaign can propel Look4aProperty into a position alongside the current portal leaders.

JC: It’s never a case that one activity or event makes a business a success. You have got have a consistent theme of innovation, creativity and differentials. The more that you do to get noticed and the more that people get to recognise you addressing the needs of the consumer, the more you’re on that journey to success. Do I think that this will be everything we do? Absolutely not. Do I think it will make a difference to this journey? Absolutely yes. For me as James Caan to be involved, it’s not about arriving on Monday and reflecting on what I did yesterday. It’s about getting involved and getting to know the business, getting to know the management team and the market, and then working towards developing what I think are innovative, creative solutions that address the needs of the consumer, and I don’t think that’s always something you can do overnight.

TN: What’s the strategy and timeline for this journey with Look4aProperty?

JC: It’s typically a three to five-year plan with any of my investments.

TN: How much did you pay for your 25% stake in the portal last year?

JC: Next question.

TN: What return on investment do you expect?

JC: As with any investment we make, we’d like to make a fair return on our investment.

TN: Understandably, but what does fair mean to you? We are, after all, talking about a crowded market.

JC: I think a lot of it depends on the journey itself. For example, in the world of private equity it’s not just about the capital itself, it’s about the amount of time we spend developing an investment. We currently have 42 different investments in our portfolio today and some take a lot more time than others, so one would expect to make a slightly higher return. Time and capital are equally valuable assets.

TN: How much time are you prepared to spend on Look4aProperty?

JC: It depends how much time it needs. If this particular initiative kicks off and gets to a point where the site regularly features in the top 10 in terms of property portal visitor traffic, it may then mean that we come up with more products because we can start to see the value. If it doesn’t make a material difference, we may have to spend more time on it. The Hamilton Bradshaw model is slightly different from the conventional private equity model. Most private equity firms in this country are financially-led, in that they are more financial engineers than they are operators. Because of my own personal background - I’m not an accountant or a banker or a lawyer - I built my business with a team of 22 experts whose sole objective is to go and help develop businesses from an operational, marketing and sales and financial perspective; it’s about what we need to do to make that business more successful.

TN: How does that approach translate for Look4aProperty in light of the low-margin, overcrowded market in which it operates, and the fact that it has already been operating for four years.

JC: You’ve got to bring something different to the market, and I think that this [Homebuyer Finance] has a concept of a product that is different enough to create a different level of interest to convince people that this is not just another portal.

TN: So, it’s essentially a PR stunt to drive consumer traffic to the portal?

JC: I didn’t say that. I think it is a great place to start the journey. It’s about doing things that drive more interest and more consumers to the site and increasing the number of people who recognise your brand and recognise your name and understand the position that you’re in. We both know that in order to create success with a real estate portal you need traffic, and I think the more initiatives we can identify that build and deliver traffic, the better the business.

TN: What advice would you give agents coming out of the market downturn?

JC: I think that a recessionary environment acts as a good reminder of what we should be doing. A buoyant market makes us complacent and results in quality becoming diluted. Everybody should take a lesson that cream always rises to the top, and that people who are good at what they do will inevitably perform in the long term. This crisis has stopped people in their tracks and reminded them that they actually have to be good at what they do; you can’t rely on the market. More importantly, don’t compromise your integrity because people do remember.

TN: How have you changed the way you approach your business as a result of the downturn?

JC: A couple of years ago, everything we looked at looked as though it was going to fly, so one of the lessons for me in investment terms is that we have stripped back to the raw fundamentals.

TN: Which are?

JC: Always back the right people with the right passion. You can have the best idea in the world, but if you don’t have the right people with the passion, the conviction and the belief, who are prepared to make the sacrifice that is needed to build a business, there’s a flaw in the plan before you start. Secondly, a business has to be demonstrable, in terms of execution. Dreams are one thing, but execution is quite another. You need to consider logistics, pricing, distribution, execution, completion, comparables, unique selling points - the execution of all of these points is key. You have to demonstrate you can walk the walk and not just talk the walk. Finally, a business idea has to make commercial sense.

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