For Homes.com CEO Tom Orsi, success is about keeping it simple and making sacrifices. Orsi joined the online real estate company in 2001, when its ship started to sink. He was brought on board after the company had run out of its initial funding and serious financial problems were surfacing.
In the dark days of the online company’s bankruptcy, Orsi remembers the difficult task of having to terminate hundreds of employees to keep the company alive. At that time, he was still a newcomer and served as the chief operating officer. He made it through the firing round by focusing on the company’s survival.
“Had it not been for (the job cuts), we would not have made it,” Orsi said.
Homes.com in 2001 filed for Chapter 11 bankruptcy. It emerged from bankruptcy in 2002, and the proceeding was discharged in July 2003, placing Homes.com among a small group of original real estate dot-coms that didn’t close up shop and weren’t purchased by larger companies. Now the company is being acquired by Trader Publishing, the parent company of Harmon Homes real estate magazines.
Homes.com today has about 120 employees. It’s core products include customized real estate Web sites, and a consumer portal of between 700,000 and 800,000 for-sale listings. After the acquisition, Homes.com expects operations and core product offerings to remain the same. The company was launched in 1998 by Homes and Land Publishing.
Trader Publishing produces more than 680 publications through more than 360,000 distributions outlets. In addition to Harmon Homes, its products include For Rent Magazine, ForRent.com, Roomsaver.com, Auto Trader, Auto Mart, and Traderonline.com. The company’s business strategy is to create a media to bring buyers and sellers together in real estate, automotive and apartment markets.
Orsi said it’s too early to tell how Homes.com and Trader Publishing might work together or whether they will eventually share listings. However, he said Homes.com has plans to launch some new real estate technology products in 2005.
Homes.com was Orsi’s first gig in the real estate industry. Prior to joining the company, he was a partner at PriceWaterHouseCoopers for 40 years. In that post, he was in charge of private practice in the U.S., running a multibillion-dollar business that had been around for 100 years. Heading a new company with a new business model during the dot-com boom-and-bust days was a different experience for him. But Orsi’s audit background proved to be an asset to Homes.com in the quest to fix its financial problems.
Orsi said the bankruptcy was part of a three-year plan that so far is going as scheduled. He’s thrilled with the Trader Publishing’s purchase of the company, saying the new relationship would enable them to do things now that would’ve taken more time had they continued as a separate entity.
“We’d always intended we would sell to a strategic buyer. The question was–do we do it now or wait a few years?” Orsi said. A venture capital firm approached Homes.com and suggested that the company had achieved a performance level that made it an attractive investment. Trader Publishing ended up being the best fit.
Since the bankruptcy, Homes.com has had stable, profitable operations and a strong customer base, Orsi said. He attributes the company’s abilities to its modest motto of promising only what it can deliver and delivering on those promises. “Following that principle has served us extremely well,” he said.
Most of the original management of Homes.com are now gone and many of the middle managers have since moved into higher positions. If it was the original management team’s over-ambition and mismanagement that sunk the company into financial duress, the remaining team’s focus on the core products and Orsi’s financial leadership is what eventually pulled them out.
While the process has been difficult, Orsi said it’s also been rewarding for him on a personal level. His advice to other companies that may be facing bankruptcy or other financial or management woes is to concentrate on the basics, support the customers and make the most of available resources.
“My advice may seem overly simple, but it is just that…Keep it simple and minimize the moving parts,” Orsi said.
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