Friday Flash: The roll-up

“We’re looking at a roll-up in this space.”

I can’t count how many times I’ve heard that phrase in the past 12 months.

Private equity firms, holding companies that dabble in software, various other Serious People – they all seem to think there’s money to be made buying up a bunch of real estate tech companies.

I know zilch about finance. I don’t have an MBA. I hate spreadsheets. But I never can quite connect the dots on this notion, and tell most of the people who put it to me just that.

Homestore pulled a bunch of companies into the orgy of aggression they had going on in the late 1990’s. We still have Top Producer, but a lot of the other stuff just disappeared.

Around 10 years ago, Dominion Enterprises rolled up a bunch of companies – the likes of Advanced Access, eNeighborhoods, Number1Expert and Homes is still with us, flying just beneath cruise altitude, but what of the rest of it?

A few years ago, Constellation started acquiring companies in our space. This accelerated last year when they took Market Leader off Zillow’s hands.

I guess these things made some people rich, and profit may have been wrung out onto the bottom line of newly consolidated P&L’s, but none of this strikes me as very exciting, innovative or lasting.

My point is that if you look from the outside in at the incumbent software players in real estate, you’re not seeing the real opportunity. You’re looking at the past.

Yes, of course –  there are plenty of exceptions. But those companies that we’d term “very early stage” or even “stealth” are so much more interesting. I’m talking with more and more of them lately.

2016 is going to be fun.

One of the reasons I like working in real estate is because it’s just so damn important. Other than agriculture and medicine, it doesn’t get more fundamental than helping people put roofs over their heads.

We try not to lose sight of that, so when we heard about New Story, we knew we wanted to help.

New Story is a charity founded to build homes for people who need them as quickly and efficiently as possible. It’s working. New Story just completed 151 homes for families who were living in tents in Leveque, Haiti.

New Story funds homes through social campaigns anyone can set up. 1000WATT has started one.

So, please join us in building a home for a family in need.

I got one of those trendy Patagonia puff jackets for Christmas. When I wear it while driving my new Subaru wagon and listening to NPR, I am the picture of Northern California self-satisfaction.

Anyway, I knew Patagonia had gone big on corporate environmental and social responsibility (going so far as to tell people not to buy their clothes), and wanted to learn more now that I had this coat.

I came upon this in the FAQ section of their website:

Do workers in factories making Patagonia Clothes earn a living wage?

Not all do.

Well, OK. There we have it. Patagonia is telling me straight up that what they sell, and what I bought, was made by someone who didn’t get paid enough to make ends meet.

We’ve heard a lot about “transparency” in our industry the last few years. But would anyone – even the righteous Redfin – really go for it like Patagonia has?

Imagine many real estate companies answering these questions transparently:

Do all [company name] agents possess strong marketing, analytical and negotiation skill?

Do all the agents at [company name] practice real estate full-time?

What percentage of your transactions fell out of contract last year?

It’s a little scary. But I imagine the real estate companies that could lay it all out there confidently might be surprised by the response.

You can now order an Uber through your Amazon Echo. This stuff’s moving fast!

Have a good weekend.