Entrepreneurs and Market Saturation

by Ivan Mazour

Over the past couple of years, I’ve started several businesses, each of them small and mainly aimed at providing a professional and personalised service to a small number of carefully selected clients. The experience of running one of them has led me to a genuine understanding of what is a well known concept, but one of such vital importance to entrepreneurs – market saturation.

The company was Park Street Estates, founded in 2009 as a high-end property management company. Having managed a small residential letting portfolio for ten years, I had faced so many issues with similar companies that it was clear that there was space in the market for a firm that would provide impeccable service – service which would actually take the stress of property management away from the client, rather than just adding to it.

My own portfolio allowed me to fill the new company’s books quickly, and formed a test for the level of service that could be offered. A further unique selling point was the fact that each member of staff spoke both English and Russian, which would allow for a more personal service for Russian clients. A professional website was quickly built and integrated into all the relevant property portals in the UK. A management system was installed, which allowed fully automatic rent collection and monitoring in order to limit the main grievance of lettings – late payments to the landlord. Friendly and professional staff were trained to use the system, and financially incentivised to go and bring in new business.

I personally oversaw each viewing, each letting and each contract for the first year, expanding the number of properties we were marketing to over ten. Since then, this number has increased to almost thirty.

Initially, I had assumed that the hardest part of running a property management company would be persuading the landlords to entrust their properties to us. Very soon, it became clear that this is not the case at all. The power lies with the tenant, because they are paying the money, and it was here that the concept of market saturation started to become real for me. A tenant looking for an apartment can go to Foxtons, Savills, Knight Frank or any one of a number of well-branded and well-marketed estate agents. They will not care that the service will not be professional, or that they will not be driven around in a chauffeur-driven Mercedes, or that the staff there don’t speak their language. For them it is a quick transaction, so all they care about is finding out about the largest possible number of properties so that they can make an informed choice about where to live. The market is saturated with agencies, and there is no specific reason why people looking to rent would go anywhere other than the largest ones.

For the landlords, the situation is different – the relationship is long-term. They need to deal with the agent for years to come, so they want to know them on an individual basis. They want to be able to call them up and discuss any problems in a friendly manner. And yet what they really want is to maximise their returns, and knowing that companies like Foxtons have the largest database of tenants, they will end up making a financially-influenced choice and working with them. Every indicator suggests that a small well-managed firm like Park Street Estates should find a large number of willing clients, yet the saturation of the market means there is just no space for it to grow.

The company continues to run, and will continue to do so in anticipation of the upturn in the property market, but the experience has been a very valuable and educational one. If you’re going to start a new business, find a niche without large-scale well-known competitors.


Ivan Mazour


Find out more on the about Ivan Mazour page.
And watch Ivan Mazour's TEDx Talk - "Why we shouldn't be scared of sharing our personal data".

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