I have long said, with the exaggeration sometimes necessary when making a contrarian point, that homebuyers and sellers are worse off today than they were before online listings, home values, reviews, and sale prices.
An article published this week in The Atlantic, “The Death of the Smart Shopper,” makes a similar point about online retail:
“…Amazon has cultivated a decentralized, disorienting mess with little in the way of discernible quality control or organization. According to Herrman, that’s mainly because Amazon’s primary goal is selling the infrastructure of online shopping to other businesses—things like checkout, payment processing, and order fulfillment, which even large retailers can struggle to handle efficiently. Why be Amazon when you can instead make everyone else be Amazon and take a cut?”
It’s interesting to think about this relative to Zillow’s partnership with Opendoor, which launched this week. Or the increasing prevalence of effectively undisclosed referral fees in online real estate (to be fair, this is really an industry-wide issue). Or the commodification of reputation reflected in the fact that every agent, everywhere online, is now a 5-star agent.
We assume that we are always moving forward. Getting better. Creating a more empowered consumer. And maybe we are. But look, we’re all smart enough to realize that what is good for company X is what’s good for company X, nothing more. The assumption that what’s good for company X is also good for “the consumer” should be questioned, always.
We were on-site with the leaders of a really great independent brokerage last week, unpacking their value prop. We kept circling around the idea of “hyperlocal.”
This is what we at 1000watt call a “poisoned well” in positioning, a space made dead by the empty claims, broken promises, and limp language of others. You have to dig deeper to get something usable, even if what you claim is true.
Which is what we did in this case, asking, for example “Don’t the owners, managers, and agents of (big franchise competitor) also live in the same neighborhoods you do, go to the same churches you do, support the same businesses you do? How are they not hyperlocal too?”
This particular company’s character is uniquely woven into the place in which they operate. The truth was there. But we had to push past the quick take to shape it into something ownable and magnetic.
This isn’t just a brokerage thing. We run into this with proptechs too. Challenging assumptions is what gets you to where you need to be.
Speaking of proptechs, I get a fair amount of demos from entrepreneurs and these days I am seeing more of something that’s always been there: Falling in blind love with your product.
What I mean by that is the tendency to conflate what your application can do with what your target customer and/or end user is willing to do. Real estate is a category with a lot of B2B2C plays, which requires a tricky contortion. If you can’t get the pro to do what needs to be done, you don’t even get to the consumer.
I have made this error myself. Almost 20 years ago, I brought to market a pretty amazing piece of software that made digital signatures easy, auto-synched local docs to the “cloud” before the cloud was a thing, and greatly speeded agent/client interactions. It was slick, and I am still kind of proud of it looking back. One problem: The agent, our customer, was required to buy a $3,000 computer in order to run the software.
Rich Barton was asked about Costar’s looming entry into our space during Zillow’s Q4 earnings call. He threw some rather high-class shade on his pending competitor:
“I guess I’ll say another thing and that is building great consumer products and brands is really hard. It requires kind of ninja-level skills on multiple dimensions, not the least of which is software engineering skills. And software engineering is in our DNA in this company. We — many of us date back to founding Expedia at Microsoft. We were all — many of us were Microsoft people and many of us engineers at Microsoft. And so we couldn’t — we can’t shake that kind of engineering DNA that we have.”
I also think he makes a valid point.
A deep-ish thought for you: “Everything only happens once.”
That’s a line I heard in a lecture by physicist Robert Oppenheimer this week.
No, I am not experimenting with psychedelics. Promise. But think about that for a while. It will make moving through your weekend more interesting.