Occasionally, the launch of a new business can be so outlandishly error-prone that it serves as a cautionary tale to others. In the case of Sweden-based real estate vertical Boneo, the gap between what was promised and what has been achieved is as wide as the Øresund Bridge linking Sweden to Denmark.
Launch of the “Hemnet-killer”
There are few markets globally home to a property empire as strong as Hemnet.se. With around 16 million monthly visits in January and $37.9 million U.S. in FY2018 revenue, Hemnet dominates the Swedish real estate market like few others. The next best rival is Booli.se with 1.7 million visits and $3.3 million U.S. in FY2018 revenue.
Rather predictably, this situation does make local real estate agents especially happy. Hemnet is able to raise prices at will, knowing full well that agents can’t afford to be off the site, and have to meekly fall into line. Therefore, occasionally, new initiatives appear in Sweden with ambitious goals to dislodge the incumbent and create a viable alternative.
Bomero.se became the latest “Hemnet-killer” when it was announced in July. It was started by seven property brokerage firms (Länsförsäkringar Fastighetsförmedling, Bjurfors, SkandiaMäklarna, Mäklarhuset, HusmanHagberg, ERA and Mäklarringen) that control more than 30% of Sweden’s real estate market. The is the same group that teamed up with Schibsted to buy Hemnet from a consortium of real estate associations about six years ago. That deal failed in 2016 when it was challenged in court by Sweden’s Competition Authority. Hemnet was sold later that year to private equity firm General Atlantic for $214 million U.S.
“In recent years, a monopolistic situation has been created in the market for digital housing advertising where an over-dominant player has been able to control and raise prices. This has ultimately hit the customers, which is one of the reasons for the launch of Bomero. We intend to launch a service that challenges both function and content, as well as price,” Marcus Svanberg, then chairman of the board at Bomero, said during the launch announcement.
With Bomero, sellers, as well as housing speculators and brokers, were promised access to a more customer-oriented marketplace for buying and selling housing. In the long term, Bomero was meant to contain statistics and developed concepts regarding new production projects, commercial properties and premises.
The Swedish media made a big fanfare of the anticipated launch and the project was deemed a credible challenger to the almighty Hemnet. However, that optimism was short-lived.
A wrong name and a missing CEO
The big media push and expansive PR campaign for Bomero was over before it could even gather pace. Shortly after announcing its launch, the company learned that another real estate firm had launched in the same year and had already registered its own name as “Bomero.”
“Our former working name, Bomero, was available as an advertising portal but turned out to be used by a newly formed company in the real estate development industry,” the company said at the time. “So besides getting a more powerful name in Boneo, we also avoid any confusion.”
The Hemnet-killer had to retreat before the fight had even started. It changed its name from Bomero to Boneo and delayed the launch of the site by a few months. All of the initial brand-name recognition in the media had evaporated, and the PR advantage had been lost.
Still, a good CEO would be able to turn the ship around and build new momentum, right?
In December, Boneo announced it had hired Niklas Jansson for the role. Jansson had previously spent five years at Schibsted as a commercial director at the leading Sweden- based auto marketplace Bytbil and head of marketing at SCM Ventures.
On paper, Jansson seemed a strong candidate, with experience in all the right areas. There was only one problem – he never showed up. In a comedy of errors, Jansson, who was supposed to start in January, didn’t actually join the company. Instead, he took a role as chief marketing officer at the Stockholm-based fintech firm Zmarta Group.
Niklas Jansson did not respond to our attempts to contact him for comment.
The fallout from this was twofold: Firstly, Jansson clearly didn’t see Boneo as a project he could lead and succeed in, and secondly, whoever came in as his replacement would be seen as the second choice.
In the end, existing board member Jens Broström was recruited as CEO and Boneo is now up and running.
“If we had not been so naïve when we started, we probably would have never gone into this project,” Broström said in a recent interview. “Of course, taken together, this does not look good. These setbacks are
the result of us underestimating the complexities attached to building a new real estate site.”
Broström has said that the company will soon present new ways of marketing itself but wasn’t willing to disclose statistics on the site’s performance. He also wouldn’t reveal how much has been spent to keep the site afloat in the meantime.
Boneo has been testing new ways of connecting its agents to customers. The site is offering a beta feature that allows users to be directly contacted by agents after answering a short questionnaire.
Today, Boneo has 9,480 listings in Sweden and 9,140 abroad (compared to 20,600 for Hemnet). In January, Boneo.se had 114,000 site visits.
The silver lining for Boneo may be that it can only get better after such an atrocious start.
For his part, Broström is still optimistic: “We are behind technically but our strategy is clear,” he said.