A UK web pioneer cracks the US; Pete Flint helped build Lastminute.com but surpassed that with property site Trulia

January 14, 2014 3:34 pm

A UK web pioneer cracks the US

By Hannah Kuchler

MBA route: Pete Flint went to Stanford business school after Lastminute.com

Arriving in Silicon Valley 10 years ago with just two suitcases and an admissions letter for Stanford Graduate School of Business, Pete Flint was a relative nobody, despite having helped start the UK’s most famous internet business.Now, as the founder and chief executive of California-based property website Trulia, he is sitting on shares worth tens of millions of dollars.

After five years with Lastminute.com, the London-based travel website that became a symbol of the late 1990s dotcom boom in the UK, Mr Flint packed up and moved to California in 2003, lured by what he describes as the “entrepreneurship in the blood” that pulses through the Bay Area.

“It was a mecca for me, coming to the epicentre of all the amazing consumer technology businesses,” he says. “But I didn’t know anyone.”

Beginning at Lastminute.com just after its birth, Mr Flint had been the jack of all trades that start-ups require: running business development, online marketing, then setting up an ecommerce business, a German business and a mobile arm for the UK group.

Alongside founders Martha Lane Fox, now a member of the House of Lords, and Brent Hoberman, who has since invested in several start-ups, he “got the bug” that led to him eventually founding Trulia.

“For many folks, being in that high- growth start-up environment, you either fall in love with it and can never do anything else or you hate it and get out,” he says at Trulia’s headquarters in San Francisco’s trendy SoMa district.

Trulia, which provides both house-hunters and real estate professionals with listings and neighbourhood data, listed on the New York Stock Exchange in 2012. Shares rose by more than two-thirds over the past year. It now has a market capitalisation of $1.3bn; Mr Flint’s stake is worth $72m.

The joy of being part of a crowd

Pete Flint shares his tips on entrepreneurship in the US and UK.

● Fast growth equates to career development: Mr Flint was drawn to the internet in the late 1990s because of the pace of growth, which allowed him to dart from job to job at Lastminute.com, learning as he went. “The faster the market grows, the more you can grow as an individual. The momentum is just a catalyst for personal growth,” he says.

● Surround yourself with like-minded people: when Mr Flint arrived at Stanford, he realised the benefits of being among other entrepreneurs. “If you are an internet company in London, you’re an anomaly, you’re unique, you garner a lot of interest,” he says. But you miss out of the benefits of being among other start-ups. At Stanford, he found “an amazing network” of students and alumni.

● Your history should not matter: One of the best things about Silicon Valley is that people treat you according to what you are trying to do, not what you have done, he says. Few knew of Mr Flint’s five years at Lastminute.com, so he missed out on benefiting from that brand or trust from investors. But he welcomes the fact that it was a “great leveller” to be respected for your ideas and nothing else.

Twelve years before, Lastminute.com’s initial public offering on the eve of the dotcom bust had been very different. Just a month after a turbocharged flotation, its shares were worth less than half the offer price and never fully recovered. The company was acquired in 2005. For Mr Flint, it was “an incredible education” in an “incredibly turbulent time”.

The Bay Area boasted Yahoo, Amazon and Ebay among many others; London had the travel deals site known for its bright pink marketing. “Moving from the UK to the US was like playing fourth division football and moving to the premiership.”

No matter how many towns and cities elsewhere prefix their most remarkable feature with “silicon” – Silicon roundabout, beach, fen – Mr Flint believes what first lured him to Silicon Valley will remain the same for “several generations”.

“This is a huge generalisation but what annoyed me at the time in England was that if there was a problem people would grumble about it, whereas in the Bay Area they’re more likely to say, how do I fix that?” he says.

Mr Flint says the vastness of California provides a testing ground that would be hard to match in Europe: to reach a similar number of people, a start-up has to overcome barriers of regulation, language and cultural norms. With Trulia, he was able to roll out the site across the US with just 20 staff.

Trulia started in 2005, born out of Mr Flint’s experiences at Stanford of trying to find a house for him and his classmates to live in. Far from his visions of Silicon Valley, in which he had imagined people scooted around on Segways and did everything via voice recognition, he found that online real estate sites were clunky.

“Not dissimilar to the experience in travel at Lastminute.com, I saw in real estate the ability to solve a big, meaningful problem that impacts millions of consumers,” he says.

Suddenly unable to sleep, he saw an opportunity to change the real estate industry, an “enormous portion of the global economy”. The site was designed to give consumers all the information they need to buy a house, from local crime statistics to mortgage data for free.

After a decade of renting locally, Mr Flint used it to find the agent through whom he bought a property in San Francisco’s Presidio Heights last year.

To make money, Trulia charges realtors for tools such as advertisements and lead alerts and for listings management. Mr Flint found the real estate industry “very, very resistant to change”. Now more than 100,000 real estate professionals use the site.

It was the housing crisis that helped propel real estate professionals to the site. “We launched the company in 2005, almost exactly at the peak of the housing market,” he says. “For the next five years, the housing market declined, our customers went out of business, real estate prices and home sales fell 30 per cent.”

When his backer Sequoia Capital, the Silicon Valley venture capital firm, told its portfolio companies in 2008 to cut costs or die as the financial crisis raged, Trulia did not follow orders. Mr Flint saw it might in fact be the “biggest opportunity for us to build a business for a generation in the real estate industry”, he says. “We had enough capital to build the business, got our heads down and then four years later we went public.”

While many real estate professionals withdrew from the housing market, those who remained were more likely to try Trulia. Desperate to cut costs, they turned to advertising on the site rather than in more expensive newspapers, while cautious customers wanted to arm themselves with as much information as possible.

Trulia is forecast to generate $140m in revenue in 2013, double what it produced in 2012. The average analyst estimate is for adjusted earnings per share of 64 cents in 2013.

The company has launched a rentals site, to help solve Mr Flint’s original house-hunt problem, and personalisation, alerting buyers to properties.

“We think of the problem we’re trying to solve as the end-to-end experience from the moment you need a new home, whether because of a family member’s new job or a new baby, to the moment you move in,” Mr Flint says, showing how he might broaden the business.

But for now, Mr Flint has no plans to bring his house-hunting site to his home country. Reeling off figures: the 5m houses sold a year in the US, the site’s 35m unique users every month and the 18 months it takes an average consumer to buy, it is clear he is infused with the energy and enthusiasm of his adopted land.

“We’re focused on the US, it is the biggest property market and it is still very early on in what we want to achieve,” he says.