MY HOME, MY SELLOUT, MY STORY

An astute entrepreneur, Jim Miley had a very simple yet shrewd business idea. He grew MyHome.ie from the start-up phase to the ultimate success of selling on the business for a whopping 150 million. He tells Niamh Mac Sweeney how he worked his magic on the web and what spurred him to selll out.

Jim Miley

Former Chief Executive of Dublin Chamber of Commerce, Jim Miley recognised a niche in the Irish property sellers market and quickly through collaboration with leading estate agents, Sherry Fitzgerald’s, Gunn and Douglas Newman Good, set about filling that gap. It was in 2000 the idea for Myhome.ie began to take shape and after securing the initial seed capital Miley pulled a team together and started to work on developing the property website. Interestingly, engaging estate agents was not a problem for the persuasive Miley who managed to get them to sign up to an unknown brand and a website that was nameless.

Miley explains that he offered the first estate agents that signed up a share incentive to get involved so they had a small investment opportunity. Simultaneously he went out to source a significant cash injection for the business and after going to a number of financial institutions, he secured AIB as the main investor who came in at the end of 2000 for the sum of €2.3 million for a minority 23% stake in the business. Once Miley had secured €4 million in funding Myhome.ie was launched on the 13th February 2001, a date of his own choosing because it is his lucky number.

A Recipe For Success

Miley says the initial stages of the business development were tough. “Sometimes you can run away with an idea because you think an idea will carry a project but it won’t. Obviously you need to have a good idea and it needs to have a solid basis and after that it is 90% graft. In our case I was fortunate I didn’t need to recruit a huge number of people so I hand picked the six people on the original team. I was able to get it up and running very quickly with a team who I could trust and who trusted each other,” Miley reveals.

He may have had to concentrate a lot of his efforts in getting the financial backing but he also travelled the length and breath of the country talking to hundreds of auctioneers and estate agents in order to have a presence in every county.

Miley agrees that timing was certainly a factor and that had he tried to launch the business five years previous it wouldn’t have taken off because internet use was too low. “When we launched just over one in four adults in Ireland had regular access to the internet. It must be said that very few had broadband and the miracle was that we managed to have a product out there that people managed to use. The nature of a property site is that in order to produce a good product you have to have plenty of downloadable pictures but in order to download them efficiently you need broadband. So for a lot of users it was a painful enough experience, but that said the way was beginning to rise and we rose with it,” he admits. Not only was Miley responsible for bring property buyers and sellers together online he also maintains that in many ways his service began to drive internet usage up.

Gauging Customer Reaction

Many businesses fail because they don’t fully understand their market. Acutely aware of this, Miley carried out detailed market research while developing the site and was determined to focus the service on the user and to frame it around their needs and objectives. He also ran a very aggressive marketing campaign. “We probably spent half a million pounds in the first three months. We took a view that we needed to use a significant portion of the money we raised to get ourselves known. There were risk factors in that if it didn’t work it would be a waste of money. It was by no means flawless when we launched but it was sufficiently robust to get a warm reception from the audience and we continue to do market research to gage their reaction,” admits Miley.

According to Miley quality is at the base of what he does. “We put a lot of emphasis on the brand because the brand is built around ‘thousands of houses one address tag line.’ The logo was chosen with the ‘home is where the heart is’ concept and we have been very protective of our brand,” he says. Another critical issues for Myhome was to ensure that the property advertised was actually for sale. “People who are looking for property don’t want to see property that is already sold, and although that concept might seem simple we were fighting an industry culture in that respect, because if you go to the window of an estate agent you will see they have properties which are already sold but we have a different proposition,” Miley argues.

The Big Sell Out

Towards the end of 2005 Myhome got a number of approaches from interested buyers but Miley says that at that point he had not been thinking about selling the business. “It was a potentially long-term vision but it wasn’t on the active agenda. We were ourselves looking to acquire other businesses but then these offers came along, so as shareholders we decided that it would be prudent to look at the market and see what interest was out there.”

In 2006 the shareholders got involved in a bidding process. Miley explains that this was a restricted process with about a dozen potential interested parties, both Irish and overseas. “We had a significant number of bids and then went into a second round process with a small number of bidders. The Irish Times was the best bid, and the best fit for the business,” he remarks.

According to Pat Maher, Executive Director, Enterprise Ireland, going hell bent for a sale is not necessarily the best approach.

"Timing is important but we would be encouraging businesses to be acquirees rather than being acquired. I don’t agree that the ultimate success is selling out. Most entrepreneurs would consider acquiring other businesses in their sector rather than being the acquired and that is the tone that we try to give businesses,” he says.

Matchmaking Buyer With Seller

With the right bid on the table Miley did not hesitate to sell Myhome, but he does agree that matching the right buyer with the right seller is critical. “Some bidders I wouldn’t have chosen to buy the business because their strategy would have been at odds with ours and this is not to say we want to do everything our way. Part of the engagement with our new owners brings a new focus to what we do, but it is important that you have a common understanding of objectives and that you are heading in the same direction. I think the Irish Times was an extremely good fit for us, they are a major publishing brand in Ireland and have significant online experience,” he maintains.

Michael Neary, Corporate Finance Partner, at Grant Thornton highlights a number of options for vendors of businesses. “A trade buyer with a strong balance sheet may recognise the synergies a vendor’s business could bring to the table. Alternatively a vendor may wish to reward the hard work of management and invite offers from a Management Buy Out (MBO) team. Often, Management Buy In (MBI) candidates and private equity houses recognise the potential of under performing businesses and make acquisition offers with a view to improving performance.

Where a suitable family member is involved in the business a succession scheme could be put in place. In all cases good chemistry between the vendor and purchaser helps to get a deal done,” Neary says.

Timing The Sellout

According to Neary there is no right time to sell. However, a good entrepreneur can cultivate opportunities and groom the business for sale. “In all walks of life timing is everything. Goods deals don’t happen by chance. A business producing steady cash together with a strong balance are always attractive targets for potential purchasers. A sale should be planned when profits and cash flows are strong and market sentiment is good,” he argues.

Miley would agree with this argument as the sale of Myhome was dictated by the market and by the approaches he got from the market. “To me the sale of anything is very simple; you have a willing buyer and you have a willing seller and if the price in between matches you have a deal. It became apparent that there was an appetite for our product and therefore the timing was right,” he reveals. He may have sold the business but in may ways Miley hasn’t really let go. Although no longer a shareholder he still has overall responsibility and will do for the next few years. “In many ways I see it as an exciting phase in the life of Myhome. We now have a new phase opened up to us, with new ownership and opportunities,” he declares.

So does he have any regrets? Apparently not as he admits he still enjoys what he does. “Ownership per say is not the be all and end all. If you get paid well for your share and you still enjoy the job I don’t think emotion comes into it. Modern business in Ireland has got a shorter life cycle than previously. The level of turnover in business is changing hands much more often and I think that is healthy and a positive thing. If you set up a business with the sole objective of selling it very quickly that can be dangerous because you need a strong business base to support it. If the business is successful then the sale issue will look after itself,” comments Miley.

Future Outlook

So what next for this perceptive entrepreneur? According to Miley he has been too busy getting on with life to be concerned with what will happen next. “I haven’t had time to plan or think but I do think I have learnt a lot from Myhome in terms of starting up a business and in terms of running it. I’ve been through the whole life cycle and that has been a very interesting and valuable learning experience and I’m still learning,” he concludes.