How Employee-Owned FBS Became a '35-Year Old Startup'

In our "Moving the Needle" series (see our previous article), RE Technology goes behind the scenes for a closer look at the companies and people in the MLS world that are using innovative approaches to help change the future of real estate. We went to Fargo, North Dakota to see what how FBS (creators of the Flexmls system) and its leader, Michael Wurzer, are "Moving the Needle."

In the world of MLS system providers, there is almost a complete bifurcation of two camps: one group of companies that are family-owned and operated, and one group of companies that are owned by shareholders, operated by managers and are publicly traded in the stock market.

One MLS systems provider that doesn't fit into either camp is FBS, inventor of Flexmls. FBS is 100% owned by its employees. Michael Wurzer, CEO of FBS, who is well known for his business acumen, says that the FBS his father founded was once family owned like many of the smaller MLS system firms, until it made its strategic pivot to become an ESOP (Employee Stock Ownership Plan). That's when the fortunes of FBS would change forever.

Rapid Growth secured by stability

In just the last three years, Flexmls by FBS has catapulted its way into becoming one of real estate's "Top 3" MLS systems. FBS has nearly tripled in size to serve over 150 MLSs and 190,000 agents. What's truly remarkable is the fact that FBS has been around for more than 35 years. According to Wurzer, FBS is poised to be around for another 35+ years, and he attributes his confidence in FBS's continued longevity to employee ownership.

Michael's dad, Paul Wurzer, founded FBS three decades ago. Michael left his career as a lawyer and move back to Fargo to run the family-owned business in 1997. It was at mid-dawn of the burgeoning World Wide Web, and Michael Wurzer was intrigued by the possibilities that emerging technology could offer to the MLS world.

Acting like a Startup

Wurzer also knew that to compete in a digital era, he had to think and act more like a high-tech startup than a family-run business. "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.

Eight years later, Wurzer converted FBS into an Employee Stock Ownership Plan (ESOP). "It's akin," says Wurzer, "to providing a company funded 401K Plan with all of the assets in FBS stock." Instead of employees contributing a portion of their income to a 401K, the company makes a contribution of FBS stock to each employee. The value of the company's stock has increased literally every year, and has grown in value since 2005 by 370 percent.

Wurzer argues that employee ownership gives FBS several huge advantages over their competition. "An employee-owned company naturally focuses on the long-term, not just the current quarter's earnings performance like as publicly traded. Employees don't have focus on hitting an earnings number every quarter and, instead, can direct that energy to better serving our customers," Wurzer said. "Being employee-owned also has significant tax and financial benefits that allow us to invest millions of dollars into developing innovative new technologies well ahead of our competition," he notes, pointing to the FBS-invented Spark API and API-driven Flexmls mobile suite FBS has launched, leading the industry on both fronts..

"Another big benefit of employee ownership is low turnover. Many here have been serving MLSs for decades and bring a lot of valuable experience to the table," Wurzer added. "This means we understand our customers' needs both in day-to-day interactions, such as on support calls, but also from a long-term strategic perspective. Everyone here at FBS is empowered as owners. Our team has the autonomy to solve problems and be champions for our customers", he said. Wurzer also knows that "every one one of the employee-owners at FBS is laser-focused on the MLS industry for the long-term, and they bring the energy and commitment of ownership to work for our customers every day."

To keep apprised of the latest innovations from FBS and Flexmls, subscribe to Michael Wurzer's blog or follow Flexmls on Facebook.

More Articles in this Series

• How FBS Stays Ahead of the Market
• The Quiet Ascension of FBS
• Inside the Customer First Culture at FBS-Flexmls