RE/MAX Acquires Booj
For those of you who don't know, one of REW's smaller competitors in the enterprise space, Booj, was acquired by RE/MAX.
I actually knew about this deal for quite a while, but I didn't want to publish as, honestly, the founder of Booj, Ido, is someone I actually think is a good guy and he deserves his exit.
Now that it's out there though, I think it's time to talk about it.
I mean, it's an obvious win for Real Estate Webmasters as we are their much larger competitor, and they have literally just sold a platform that was promised to be 100% market exclusive to independent brokerages (one per area) to the largest, most capable competitor they have.
It was their most important promise!
This is after spending years having those same independents not only contribute their ideas, time and requirements in a collaborative "safe" environment to the platform but also fund the entire thing.
Looking back, I'm sure it feels like a bait and switch, and I know there are a lot of folks feeling a little betrayed by the whole thing.
So let's take a look at this deal and see who the winners are losers are:
Winner #1: Ido Zucker
Again, super nice guy, and I'm glad he is getting an exit—truly, I am. He's been a worthy competitor and he's a guy who loves his wife and family. Hats off and nothing but well wishes to Ido.
He gets a big fat cheque, and he gets to pick what adventure he wants to go on next and will have the funds to do so.
Winner #2: RE/MAX
Honestly, Booj was truly an up-and-coming platform. As I mentioned before, it has years of ideas and features that were contributed by some of the smartest brokers in the world. It had a lot of great stuff in the backend that helps brokers' businesses, and their design work is probably top 5 in the space (I would argue Real Estate Webmasters and 1000Watt hold the top 2 spots).
RE/MAX gets speed to marketing with a good product, they benefit from the ideas and innovation of their competitors, and IF they can convince the team to stay post acquisition, they get some really awesome talent in the folks at Booj.
Loser #1: RE/MAX
So here's the thing: I have never (and I mean never) seen one of these acquisitions work.
The culture and passion of an entrepreneurial startup with momentum gets absolutely destroyed when faced with the new realities of corporate overlords. Mark my words, if history is any indicator of the future, all of that talent (the best talent) that was responsible for the success and innovation at Booj in the past will be gone. It happens every time!
How many of the top folks at RealSatisfied are still there? Think about it.
And honestly, RE/MAX is a real estate company, NOT a technology company. Their track record of innovation in technology is absolutely terrible. They have not been a leader in the space in any way, don't have experience, and most certainly do not have the innovative vision and team to manage a transition like to this the finish line.
I get it. You're scared of Compass and EXP who are actually tech-focused companies eating your lunch. But seriously, acquisition + DIY is a recipe for failure and I just can't see it working.
And then there is the price: We all know how these deals work. Acquisitions in tech are multiples of revenue. You are likely paying a premium for a group of customers that are 100% guaranteed to be unhappy about this acquisition and are already looking for other vendors.
Again, think about it. Why would an independent that was lured by the promise of exclusivity and "protection" from companies like RE/MAX decide to stay now that all their hard work has been sold to their biggest competitor?
Obviously, I don't know what RE/MAX paid for the company, but if it's based on revenue, unless there is an earn-out (in which case Ido joins the loser column) then RE/MAX has likely paid too much.
The biggest loser: Booj Customers
I have already had several Booj customers call me or email me directly about this announcement. They are understandably upset.
The message seems to be: don't worry, just because we are now owned by RE/MAX (your biggest competitor) doesn't mean things are going to change.
In fact, RE/MAX has tons of $ and they are going to invest, and the technology and offerings are going to get even better!
Are you serious?
It is ABSOLUTELY TRUE that RE/MAX would not make this acquisition unless they planned on investing in it. But let's not kid ourselves. There is no conceivable plan that would result in RE/MAX sharing those benefits or that innovation with their competition. NONE!
If I'm RE/MAX, I try to keep these independent customers for as long as I can UNTIL I roll out new features. I mean, they paid for them, right? Might as well let them keep funding development for what now is the RE/MAX enterprise platform.
I mean, think about it. The longer they delay the hammer on the independents, the longer the independents are being held back from finding an alternative and getting their projects started. And in many cases, the move will take 6-12 months. If RE/MAX can delay them 2 years by promising new and awesome stuff, some might stay and then BAM!!!! The Hammer!
This is the part where I can see a company like RE/MAX saying (and this is just a prediction, I can't say this is their plan), "You know what? Thanks for the funding for the past few years (and additional ideas) but we've decided that this platform is going to be RE/MAX only. We're not going to renew your subscription and certainly are not going to allow you access to the RE/MAX-owned enterprise platform."
Now you're several additional years behind, and you have no plan and no options.
There is just no other way I see this thing playing out. RE/MAX is in the RE/MAX business.
If I'm a Booj customer, I'm leaving as fast as possible! We're already seeing it happen (just signed one the other day) and there are a lot more coming out of the woodwork.
As I mentioned above, this is an obvious win for Booj competition like us here at Real Estate Webmasters Inc. It certainly isn't by design, and I certainly would never wish forced change on anyone at this scale—but it's here.
Cheers,
Morgan Carey, CEO
Real Estate Webmasters Inc.
Update:
Announced in 2022, RE/MAX will be shutting down Booj. As reported by Inman news, "RE/MAX will offer similar tools via kvCORE, a platform from tech company Inside Real Estate".