For over 35 years, Fargo-based company FBS Data Systems has been offering multiple listing services for real estate agents. But CEO Michael Wurzer still calls it a “35-year-old startup.”
The company started 35 years ago by Paul Wurzer. Now, his son Michael has taken the reigns on what is the third largest provider of real estate multiple-listing software (MLS) in the nation, founded and grown right here in Fargo.
Wurzer describes multiple listing software as a co-op among realtors in any given region.
“The realtors get together to cooperate and share info,” he said. “The competitors work together to decide how to use the market. It’s like piloting little tiny real estate stock markets.”
Before multiple-listing software, realtors exchanged information by printing out a book of listings that were for sale. As technology shifted in the late 70s, they wanted to automate the process. Paul Wurzer wrote a system that did just that.
“It’s become an all digital process,” Wurzer said. “There’s a long part of our story that comes form technological transformations that the company has had to go through.”
At the time, nobody was conducting commerce through the new and scary “Web.” When Paul asked his son to take over in 1997, Michael was intrigued at the new frontier that the technology offered. So he left his job as a lawyer, moved his family to Fargo, and has been running the company ever since.
In those 17 years, the company has grown from 20 to 80 employers, and from serving 10,000 real estate agents, to 165,000 agents today. They provide their software, called FlexMLS, to a worldwide organization called Multiple Listing Service. FlexMLS is now offered in 160 metro areas, varying in size from Arizona regional MLS (AR MLS) with about 30,000 agents, to Williston, North Dakota, with only 100 agents.
Entirely Employee Owned
From about a dozen competitors, FBS Data Systems falls about third or fourth in the world, Wurzer said. A huge factor in what differentiates them from their competition, Wurzer said, is the fact that they are 100% employee owned.
“I knew with the dot-com era, we had to show the people we wanted to hire that they were going to have a stake in the outcome,” Wurzer said.
FBS Data Systems operates under an Employee Stock Ownership Plan (ESOP). This is just like a 401K plan, Wurzer said, except that the stock is all corporate stock, and employees don’t contribute their personal money but rather the company gives them stock.
The ESOP plan is not uncommon in Fargo. Companies like Border States Electric and Scheel’s are also employee-owned, making Fargo “a hot bed” for employee-owned businesses, Wurzer said.
That’s no surprise to Wurzer, who finds the model to be highly successful. The employees themselves are aware of how having ownership in the company improves their commitment.
“Each employee has a full stake in the game, and that directly translate to how we service our customers” said Dave Rifkin, an FBS employee.
The employees are also always aware of how much the stock is worth. For FBS Data Systems, the price has always been going up, according to Wurzer. Since they became employee owned in 2005, the company has grown in value by 370%.
“Having ESOP for 10 years is really starting to show the pay off,” he said. “It translates to having a consistency for our customers, with employees that stick around. Only half a dozen people have left the company in the past 15 years.”
Maintaining the Startup Mentality
Another factor to their success is maintaining a startup mentality, Wurzer said. As the company transformed to become accessible on the Web, and more recently on all mobile devices, the way they do business has been constantly changing.
“We’re really acting like a startup,” Wurzer said. “The people that we are hiring are all about changing what we’re doing. I still use that phrase today, that we’re a 35-year-old startup.”
While they might keep the startup mentality, the company is old enough that they have learned some tried-and-true methods to success. The first, Wurzer said, is utilize the local talent pool. Where most companies see this as a weakness in Fargo, Wurzer has found a strength by setting up internship programs with local universities and taking a chance on young software developers.
“Look to your local universities here for talent. There is good talent here, and they’re excited and ready to grow and learn,” he said. “It isn’t always about hiring great experience, it’s about hiring excellent talent.”
His second bit of advice is for all companies to at least consider the ESOP plan.
“It is a different structure, and sometimes for a starutp it’s not the perfect vehicle,” he said. “But long term, it’s a perfect vehicle for creating owners.”
Photos courtesy of FBS Data Systems.