Idealista.com

On Wednesday we had a workshop with Jesus Encinar, charismatic founder of the largest Spanish real estate web site idealista.com. When Jesus founded Idealista in 2000, the Spanish on-line real estate market seemed to be more than overcrowded with around 30 real estate sites. Jesus decided to differentiate by focusing only on Madrid and getting as much ads as possible. His good “off-line” preparation before actually launching the site brought its fruits so that Idealista had 5,000 adds at the time of the launch, which qualified it to the largest real estate site in Madrid from the day one. Jesus’s team achieved this by placing 25,000 tele-sales calls to both real estate agencies and individuals.

Idealista’s second differentiating feature and competitive advantage at the same time is the simplicity and user friendliness principles applied to the web site design. Both is achieved by continuous improvements employing latest technologies as eye camera and heat maps. However, the most powerful user friendliness tool is proximity of web developers and testers in Jesus’s team. Web developers are invited to come and see the users struggling with their complicated design, which made them correct the mistakes quickly and silently.

However, funding was the issue as costs of establishing a web site back in 2000 was approx. EUR 1m in comparison with EUR 400 per month, deal you can get today. Investors were not eager to step into Jesus’s business as it was only Madrid local preferring scalable international projects. Hence, Jesus hired Andersen Consulting to raise EUR 6m in venture capital. The money were eventually raised after speaking to 150 different investors and using the Andersen’s credibility.

After penetrating major cities in Spain, Idealista went to Portugal and Italy, two markets culturally proximate to Spain. While expansion into Portugal was literally virtual with little local presence and dedicated Portuguese call centre in Spain, expansion to Italy was a different story. Italy appeared to be a hot market, where you had to be so that Jesus decided to follow despite the fact his two main competitors lost EUR 1m and EUR2m respectively while doing business there. Entry to Italy represented challenge as all Idealista’s profits from Spain were invested into Italian market for two consecutive years. Jesus drew important lesson from this experience that it is better to be powerful leader in your market then being diluted in many countries.