Dubizzle founders step down as Naspers takes a majority stake: What's next
Note: photo submitted by Dubizzle.
After eight years of running Dubizzle, the biggest classified ads
site in the UAE, founders J.C. Butler and Sim Whatley have
announced that they are stepping down to return to the U.S. and
spend more time with their families.
"It's been something we've been working on for awhile. We made the
decision that we wanted to transition out of the business last
year. Dubizzle is so far away from where we're from, and it became
about more than just us, it became about the needs of our wives and
families,” says Whatley, who is expecting a child soon.
“We also felt that Dubizzle needed us less and less; we had been able to hire very talented people who had grown within the organization, and we could see that we were being needed less and less to make decisions,” he reveals. Butler, who had one child last year and has another on the way, echoed the same sentiments.
The move will see the two founders sell a portion of their
equity to investor MIH, a subsidiary of South African media
multinational Naspers, which will now own a majority share. In
2011, MIH invested for a 25% stake in the company.
“If we're not going to be here, running the business, [we realized
that] it was in all of our interests- J.C. and I and MIH- to get
their share up to 51%,” says Whatley. Neither founder has immediate
plans for the future, but both remain "significantly" invested in
the company.
Can Dubizzle tackle a market outside the UAE?
The founders' departure comes after a two-year struggle to expand;
while Dubizzle continues to see wild success in the UAE, it hasn’t
been able to successfully own a new market.
It’s clearly a bittersweet moment for both Butler and Whatley, who
famously built the company up from scratch, investing $12,000 of
their own money, living on passion and a 10 AED-a-day budget until
they met an angel investor in 2006.
In the early days, they acquired customers “one person at a time,”
says Whatley, cold calling offline secondhand sellers with a
friendly pitch to let them know that online was a better
option.
Today, Dubizzle is the 7th most popular site in the UAE,
ranking 1,180th globally, according to analytics
platform Alexa.
Experience listing jobs, properties, and goods in the Dubai market
did not prepare the founders for the steep learning curve that they
hit when they went to make a regional land grab, says Butler.
“Our only experience had been launching in the UAE, where we were
our target audience; we spoke English, and we could do a lot of
trial and error. When we wanted to launch across the Middle East,
we didn't know how to do it,” he candidly admits. “We wanted to
launch in all of these markets at once. It was a plan, but it
wasn't necessarily a good one. We made a lot of mistakes.”
After going down a “bumpy road” to launch an Arabic site, they
"flipped the switch on" in every major Arab market from Morocco to
Oman, except for Iraq, Palestine, and Yemen.
Today, the site has closed down Libya, Syria, and Morocco, all for
obvious reasons; Morocco may not be politically unstable, but it’s
a saturated market where first mover Maroc Announces is battling
it out with Russian giant Avito and Swedish-led Bikhir to
retain its market share.
When we asked Butler about Morocco this April, he noted over email
that they shut down operations in early 2012: “We had dipped our
toe in the market but had decided not to pursue it.”
To counter their mistakes, the founders hired Arto Joensuu, who
will now step into the role of company CEO. “When we found Arto…
that's when our internal communication strategy really started to
form,” says Butler. "It forced us to go on a soul-searching
journey as Dubizzle."
Going after Egypt
Perhaps Avito’s entrance into the Egyptian market (as Bekam, not to be confused with price
comparison site Bkam) in mid-2012 made Dubizzle double down on
owning Egypt after giving up in Morocco. When we visited Cairo this
March, we couldn’t help but notice billboards plastering the city
with Dubizzle’s name, boasting their unfortunate transliterated
tagline: “bee3 weshtery in your city” (“sell and buy in your
city”).
Avito, which recently merged with two other Russian sites to become
the third largest classified site in the world after Craigslist
and China’s 58.com, is known for spending millions on marketing and
user acquisition. In its latest funding round this March, it was
valued at around $270 million.
Not to be daunted, Dubizzle sent a team to study the market on the
ground and quickly produce television ads. Now, Butler says that Dubizzle has
become a “household name” in Egypt, despite the political
instability. The company is taking a “long term view," but also
having “bigger and faster success [in Egypt] than we had in UAE
during the same time frame.”
When it comes to their customer acquisition strategy in Egypt,
or any of their new markets, Butler says there’s no magic
formula.
“We use the same digital channels, the same offline channels; maybe
we do more face-to-face on the ground stuff,” he says. “I think a
lot comes down to the DNA of our vision; it's not just about
conversion rates and numbers.”
What matters most, he says, is their philosophy (during our
conversation, both Butler and Whatley repeatedly got philosophical
about the impact of classified ads on growing economies): “Our
goal is to disrupt something that's not working, and to better
people's lives by bringing transparency to economies, and to allow
self-starters to raise themselves up by their bootstraps and make
money in ways they've never been able to make money before."
Challenges to Dubizzle
Dubizzle has successfully monetized via display ads, targeted
property and auto ads, and by taking a fee for posts over a certain
quantity. But if it rests on its laurels, rivals like
Propertyfinder.ae and Bayt.com could potentially claw market share
by providing a better user experience.
Dubizzle claims that its property section has “seven times the
amount of traffic” that Propertyfinder.ae has, yet rival
Propertyfinder.ae’s interface is a bit sleeker. In time, that could
make a difference. Perhaps especially in the auto segment, which
seems to dominate the majority of Dubizzle's non-UAE markets.
Whatley insists that the site is already improving its experience,
and hints that that will be a bigger focus in the days to come:
“You'll see some customization within these verticals. We release
something every week."
And now, the task of keeping users happy will fall to Joensuu, who displays what might be some trademark Dubizzle bluster. "It's a sad moment in terms of not being able to see the guys [Whatley and Butler] everyday, but in terms of our future, it looks very bright. We're not in the business of being another classified site; we’re in the business of changing lives. We're ready to kick some ass."