Metrekare.com

What did it do?

Metrekare.com was a Turkish property listings site that presented homes for sale and rent with larger photos, district- and neighbourhood-level price analysis and information about the surrounding area. Alongside the website, its Android and iOS apps let users see nearby homes and estate agents' offices. It planned to make its money from annual memberships paid by estate agents.

Why did it shut down?

According to founder Serhat Karahan, the biggest gap was that nobody on the team knew the property sector from the inside. Estate agents were happy with Sahibinden.com and Hürriyet Emlak, Turkey's established listings platforms, and saw no good reason to use a new site. Giving membership away free at first devalued the service; paid memberships became hard to sell, and the free accounts were barely used. Despite a plan forecasting 10 million lira in revenue over five years, there was almost no revenue at the end of the first year. The team began to see in April 2014 that the business would not work, and in June 2014, with the investors' approval, decided to liquidate the company.

The story

After Boğaziçi University, Serhat Karahan had worked at McKinsey and Rocket Internet before joining the venture capital firm Earlybird in 2012. While scouting investment opportunities there, he focused on property and became convinced that the home-search experience could be improved: listings were duplicated, old listings kept circulating and photos were tiny. Together with his university friends Halil Akın and Arda Bayındır, he launched Metrekare.com in 2013 as a next-generation property listings site.

The start was bright. Earlybird made its first investment in Turkey in Metrekare, together with Aslanoba Capital. According to a December 2013 report by Webrazzi, the Turkish tech news site, the amount was not disclosed, but Karahan said it was a seven-figure sum. Within a few months the site had reached close to 100,000 listings, released its mobile apps and built a team of 13. Neighbourhood-level price analysis, local information such as schools and metro stations, and street view were features its rivals lacked at the time.

As Karahan told Fast Company in 2020, the trouble started with the fact that nobody on the team knew the sector from the inside. Estate agents were happy with Sahibinden.com and Hürriyet Emlak; they could not see why a new site was needed. The team reached 5,000 estate agents in its first year, but giving membership away free at first devalued the service. They struggled to sell paid memberships, and the free accounts were barely used. The plan forecasting 10 million lira in revenue over five years did not hold up; at the end of the first year there was almost no revenue.

In April 2014 the team began to see that the business would not work on this model, and in June 2014 the decision was taken to close it. Webrazzi listed Metrekare's closure among the week's highlights in Turkey in the last week of June 2014. By Karahan's account, the investors were surprised at first but, once they saw the picture, approved the liquidation of the company. The team, which had grown to 20, broke up, and in the years that followed Karahan returned to corporate life.

Looking back, Karahan says that before starting he should have visited dozens of estate agents to learn the problem in the field, brought someone who knew the sector into the leadership team and worked with more experienced developers. Metrekare's story shows that a good product and strong investors are not enough to keep a start-up alive if it cannot give customers a reason to change their habits.

Lessons for founders

• Before writing any code, learn the problem you are trying to solve in the field, alongside the customer.
• If you do not know the sector, bring someone who does into the leadership team from the very start.
• Turning a service you have given away for free into a paid one is harder than you think.
• Being better than the incumbent is not enough; give customers a clear reason to switch.

Sources

1. Serhat Karahan: "Why did I shut down my start-up?" (Fast Company Türkiye, 2020-08-17)
2. Property listings investment from Aslanoba Capital and Earlybird Venture Capital: Metrekare.com (Webrazzi, 2013-12-18)
3. Week in Review: Android One, Android TV, Uber Istanbul, Metrekare.com, Twiplomacy (Webrazzi, 2014-06-27)

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