Simon Baker, 41, is a wealthy man. When asked in an interview last year why, with his fortune, he did not retire to a tropical island, he gave this reply: “I want to know if I can make this a $1 billion business.”
Now he’ll never know, and neither will the board that dumped him in a high-risk gamble that they can recruit someone better. During his tenure, the market valuation of Realestate.com.au grew from $4 million to $480 million.
So why was he sacked?
Here is an entrepreneur with a great track record, hell bent on turning RealEstate.com.au into a global juggernought. Baker lost his marriage and worked extremely long hours – much of it on a plane – to build the business.
Then, just as the economy is tanking, the board, dominated by News Corp executives, decides he is not the man to take the business to the next level. It doesn’t make sense and seems a huge risk to take in such an uncertain environment.
Surprisingly, Baker does not sound bitter. He did not even sound shocked. Instead, he sounded extremely proud of his track record and excited about his future.
So why does he think he’s been dumped? “I really don’t know,” he says. It is as the press release says, he then tells SmartCompany – the board is looking for someone different.
He won’t elaborate. But sources say Baker has ridden a hard race and the board was looking for someone who was “easier” to handle.
Sources say the culture inside the company and the culture of the board are quite different.
One News Corp source says Baker was too entrepreneurial in the current environment. When told of this statement, Baker is surprised. “In the current environment, entrepreneurial is good,” he says.
Apparently there were no major rows with the board over future direction. In fact sources say the future direction as outlined by Baker has been accepted as the strategy going forward.
But out of the blue, the topic of him leaving was raised a few weeks ago. He was given three months to transition but suddenly was told yesterday that it was time to go.
He says there are no nasty results to emerge in the coming months. “In seven years I have done a great job. The business is in good shape and we have a really good team in place. They have the right mix of entrepreneurial skills and hard management skills, and they will continue to grow it. I passionately believe in the business.”
Baker refuses to speculate further on the board’s motives. Given that he still has $11.8 million tied up in RealEstate.com.au shares, it is no wonder. But he also seems ready to move on. “I was looking at the organisational chart from 2001. We had 25 people and eight are still with the business.”
So what’s next? “I am looking at a number of things,” he says. “But I am not in a rush.”
He says he would not follow the path of other entrepreneurs and invest in a number of start-ups. His mantra is: “One person, one role, one focus.” Baker says: “I have to focus on one thing. My objective is to go into a large organisation and help it grow something.”
He says he has no “non-compete” but would not go to Fairfax as it was not the type of environment he would enjoy. “It’s a large corporate and would drive me crazy.”
He is not just looking at Australia. “There are great global opportunities, particularly in emerging markets in Asia, India and eastern Europe. I like to create long-term value online, whether it is jobs, real estate – it’s all about classified ads. My knowledge and skills are very transferable.”
When asked who should take on his old role, Baker says someone who has a balance between being a strategic thinker and being practical. “It needs a pragmatist who can understand the future of the business. It also needs someone who can understand the culture. We work hard and we play hard. We have a lot of fun in what we do while having a lot of respect for people. We are collaborative and work in a team in everything we do. We are like one big family.”
It is indeed, with 719 staff and a management team of 10.
In the immediate future while he examines his options, he will spend more time at Artshub, of which he owns 70%.
“It has north of $1 million revenue and 10 staff. It’s a little business that makes a little bit of money that is then reinvested, so we break even. We are in the UK and now do stuff in the US. They will be happy to see more of me.
“Realestate.com.au has gone a long way and it’s been a fun ride,” he says.
Simon Baker’s tips on building Realestate.com.au
On his plan to turnaround realestate.com.au: “Reduce product on the site to what mattered, focus the sales team, get some quality people on board. I applied the theory of simplicity of offer and clarified who we are selling to [agents]. I set clear targets and clarified how staff are expected to perform.”
On keeping up with trends: “I don’t have a life. I spend way too much time travelling – 15 or so trips a year. When you do that, you find out what is happening in the market, and you talk to a hell of a lot of people. I would have met recently 30 CEO equivalents. I call them up, and tell them what we’re doing.”
On running an aggressive export plan: “Australia is not the game; Australia is the stepping-stone. It has given us the right to grow. I could never have half a billion in revenues by staying local so I have to go into other countries. At this stage I am not sure which single other country will be the golden egg so we are going into multiple countries.”
On staying in touch with customers: “If you don’t understand the people who write the cheques and read the website, the danger is you become distant from your customers. That is why we have real estate blogs; I deal with agents, my telephone number is accessible, I go to conferences and I also take clients out and get them drunk. You have to shut up and listen and make them feel comfortable.”
One of the best things he ever did: “Spending time at McKinsey & Company. You get to see dumb businesses, all the ways not to do things.”
On choosing the way to grow Realestate.com.au: “One is through organic expansion – throw up a new website and then start from customer number one. The other is through acquisition. Now in 2005 we weren’t 100% sure which was the best way to go. We were, in terms of expansion overseas, babes in the woods, so what we said was ‘well let’s do something simple’.
“We had a very easy way in which we could approach the New Zealand market. We did something as simple as put a map of New Zealand next to the map of Australia on realestate.com.au. We hired a bunch of New Zealand backpackers in a call centre in Melbourne and got them to call in to New Zealand and we, for a very low cost, started with customer number one.
“So absolutely, I think for us it was the right thing to do because it allowed us, at a low cost, to experiment into a new market.”
On watching costs at the start: “We kept a close eye on where we were spending the money. It was a case of ‘use one piece of toilet paper at a time’. We were very open about how we were going financially.
I showed staff the revenues, explained what the costs were and how the money was being spent. I said to them, ‘If we keep spending like this, no one is going to put any money into us’, and that really engaged people in the future of the business.”
On operating remotely: “If you’re going to run something in multiple countries just prepare to lose a lot of sleep and enjoy plane food, and that’s just life; otherwise don’t do it because you’ll end up being ignored by the other office because you’re not there.”
On the psychology behind an entrepreneurial CEO: “Make the steps. It isn’t that hard. You just have got to jump those mental barriers.”
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