Who Is the Fish?

I saw a LinkedIn post recently about growth. Growth is uncomfortable. Hiring your first employee is scary. Making your first investment is scary. Delegating is difficult. Confidence comes after action.

None of it was wrong. That was almost the problem.

I had read every sentence before. Not necessarily from that person, but from hundreds of people over fifteen years of LinkedIn, Twitter, business books, podcasts and conference stages. Different author, different photograph, slightly different arrangement of the same words.

There is an obvious temptation to dismiss this as the inevitable blandness of the platform. But something more interesting is going on, because if this content were genuinely useless, businesses would eventually stop producing it. They haven’t.

Perhaps the mistake is assuming its purpose is to tell everyone something new. Often it isn’t. Its purpose is to find the person for whom it is still new.

Sometimes content isn’t there to inform you. It is there to identify you.

The fish

There is an old saying in poker. If you have been sitting at the table for a while and you cannot work out who the fish is, it is probably you.

The language is deliberately brutal, and the analogy only carries so far. In poker somebody has to lose, because the money at the table is finite and it moves between the players. Property isn’t like that. Everyone at the table can do well, or badly, largely independently of each other.

What does carry across is the only part that matters here: not everyone at the table is holding the same information.

Every business needs customers, and every piece of marketing is therefore trying, at some level, to identify somebody more receptive to the proposition than everyone else. That changes how repetitive content looks.

The hundredth post explaining that property is a long-term game probably feels painfully obvious to somebody who has owned property for twenty years. It may feel profound to somebody considering their first purchase. A post explaining leverage, or inflation, or why rent can cover a mortgage might contain nothing new to an experienced investor, but experienced investors may not be the intended reader. The content is doing its job if the right inexperienced person sees it at the right moment.

Follow the number

This becomes much more interesting when you apply it to property investment businesses.

Look at enough companies’ marketing and the same numbers keep appearing. Start investing with £50,000. Have £60,000 available? Build a portfolio with £100,000.

There is nothing inherently wrong with targeting somebody with £50,000. Everybody starts somewhere, and plenty of sophisticated investors began with less. But the number is worth noticing, because a company’s minimum advertised investment tells you something about the customer its acquisition machine has been built to find.

Why £50,000? Why £75,000? Why does nearly every example begin with somebody who has inherited money, sold a business, released equity or accumulated cash in an ISA? Why is so much of the education about getting started? Why does the marketing spend so much of its time explaining the most basic concepts in property?

Those aren’t criticisms. They are clues.

The same reading applies across everything a company publishes. If every advert is aimed at first-time investors, if every webinar opens with the basics, if every case study is about somebody starting their property journey, if the entire sales process is optimised around one deposit size, one property type and one financing structure, there is probably a reason. It might simply be an efficient business serving a large market. But if you are the customer, you should still understand where you sit inside that model.

Enough money to transact

There is a commercially attractive point in almost every market where somebody has enough money to buy something but not necessarily enough experience to know exactly what they should be buying. Property has a very obvious version of it.

Someone with £10,000 usually cannot transact. Someone with £50,000 might be able to: enough for a deposit, fees and purchasing costs. They may also be buying their first investment, and that combination is the point.

A buyer can be financially successful in their career and almost completely inexperienced in property. A surgeon, a business owner, a senior executive, an engineer. They are not stupid. They are entering a market whose incentives, financing rules, valuation practices and distribution structures they have never had a reason to study.

That creates an enormous market for simplification. Here is the area. Here is the development. Here is the yield. Here is the deposit. Here is the monthly cash flow. Here is the solicitor, the broker, the letting agent. Everything appears to have been solved.

That can be genuinely useful. It also makes it very easy to stop asking questions. The smoother the process becomes, the easier it is to forget how many assumptions have been made on your behalf.

The economics change with scale

There is another reason the minimum number matters. Fees behave differently depending on how much capital somebody has.

A £5,000 sourcing fee paid by an investor deploying £50,000 is ten percent of that capital, gone before the property has produced a pound. The same nominal fee matters considerably less to someone deploying £500,000.

Off-plan creates a less visible version of the same problem. The buyer might never receive an invoice for £15,000 or £20,000, because the distribution cost sits inside the price of the property instead: developer margin, marketing company, sales organisation, broker, referral structure, incentives. All of it may be perfectly reasonable. Businesses have to be paid.

The useful question is what percentage of the investor’s money is being consumed by the machinery required to sell the investment to them. And that question matters most when capital is limited.

The person with the least money to waste can sometimes be buying through the most expensive distribution structure.

What happens when the investor gets bigger

Now look at the other end. Imagine somebody deploying £2 million rather than £50,000. They may still make terrible investments, because money does not automatically produce sophistication. But the conversation usually changes.

What are the comparable transactions? How liquid is this asset? Who is the natural buyer when I sell? What happens if the mortgage valuation comes in ten percent lower? What proportion of this building is investor-owned? How much competing rental stock completes nearby? What happens to the service charge? What exactly is included in that net yield? How dependent is the return on one operator? What would this property be worth without the rental arrangement attached to it? Why is the developer selling it rather than keeping it? What does my portfolio look like after this?

Those are harder questions to answer with a brochure. They require more work, and they make the customer considerably harder to sell to.

None of which means a company advertising to £50,000 investors can’t work with wealthy clients, or that every high-net-worth investor receives good advice. It means only that the customer a business repeatedly pays to attract tells you something about the business.

Which applies to me

You should run this on me before you finish reading, so here is the answer.

I sell a fixed fee, and a fixed fee is proportionally heavier on smaller capital in exactly the way I have just described. That is true and there is no version of it that isn’t.

The difference is often the denominator. In a recent engagement the fee was priced against a position somebody already held, rather than against capital they were about to deploy: £3,000 against a property bought for a little under two hundred thousand pounds, most of it still recoverable. That is a shade under two percent of money already exposed, spent on deciding what happens to it. It is not the same shape as a five thousand pound fee taken out of a fifty thousand pound deposit at the point of purchase, and I would not defend it if it were.

But the floor is real, and it cuts against me. Below roughly a hundred thousand pounds of capital, nobody should be paying significant money to have somebody else think about property on their behalf, and that includes paying me. The Framework exists at £450 for exactly that reason, and if that is where you are, that is the honest answer rather than the cheap one.

So, who I am paying to reach. What I put in front of people is aimed at somebody who already owns something and has begun to worry about it, or somebody about to commit who would rather be harder to sell to first. My fee doesn’t move with the size of the transaction and I do not need you to buy anything at the end of it, so there is no direction the marketing can quietly point you in.

That is what my number says about my model. Now you have the same information about me that I have been suggesting you go and find about everybody else.

Read marketing backwards

This is increasingly how I think marketing should be read. Not what is this person telling me, but why are they telling me this. Who needs to hear it. What action are they hoping that person takes next. What does that person probably already know, and what do they probably not know. And why is this particular customer commercially attractive.

You can do it with almost any property company. Look at the homepage, the advertisements, the webinars, the language. Look especially at the number. The minimum investment figure is rarely random, and it often tells you exactly where the net has been cast.

Once you notice that, the repetitive post stops looking quite so pointless. Maybe it was never written for you. Maybe you already knew everything in it. The more useful question is who didn’t.

Because in poker, if you cannot identify the fish, the fish might be you.

And before responding to any piece of marketing, it is worth asking a slightly different version of the same question.

Who is this designed to catch?