There are three kinds of technology in real estate:
- “Pure” technology that helps pros and consumers make home sales happen (think DocuSign, Dotloop, SkySlope, the algorithmic work that is the foundation of iBuying).
- Marketing technology, or “martech” that enables agents and brokers to promote themselves and their listings (think ActivePipe, Homebot, BombBomb).
- Technology that is marketing.
Compass announced a new product this week, Lens, that I believe fits into this third category.
Lens uses data science and computer vision to estimate the value of home renovations. It has a clever “before and after” interface that shows a photo of a room in the subject home along with a similar, remodeled room in another home.
Inman’s story on Lens quotes a Compass press release as stating that before this new technology, “an experienced agent would walk through a home and determine which improvements should be made.” I guess this new way has some practical utility during a pandemic, but is the suggestion here that agents should forevermore abandon sizing up a home with their sellers, in person, to apply their expertise in weighing the value of renovations?
I don’t think it is.
I think Lens is agent marketing and investor story-making. There’s nothing wrong with this. But understanding what things truly are is important, especially as Compass inches towards an IPO, where the public will be sold stock. My opinion is that this is all, in effect, marketing. Not industry-changing, value-unlocking, margin-increasing technology.
I made a similar point about Keller Williams declaring itself a technology company four years ago, which I viewed as a strategic marketing campaign for which some technology would need to be built.
Compass is often referred to as a “technology forward” or “tech powered” real estate company. I think this is mistaken. I see Compass as a capital-engorged marketing story attached to a traditional real estate brokerage.
Relatedly and in contrast…
Docusign acquired Liveoak Technologies, a company that offers a live collaboration platform, and simultaneously announced an online notary service.
Notarize closed a $35 million funding round and claims to have grown 400% over the past three months.
These things are happening now because of the pandemic, but they will outlast the pandemic and materially change how real estate transactions are conducted.
If you missed our 1000watt Forum last week with indie broker Lindsay Dreyer, you can view the video recording here. It’s a great conversation with a sharp and assumption-challenging leader.
Since launching our recruiting solution late last year, we’ve had the opportunity to work with some great companies.
Here’s our biggest takeaway:
Good companies often undermine themselves by heading toward the drain-circling comparison battle over tech, tools and training. Unless you’re a brokerage that creates sexy technology no one else has (say like a certain company I mention above), you’re just asking to be viewed as a commodity. And we know how that’s been playing out for most brokers.
If you’re a truly good brokerage, with strong leadership, a palpable and inspiring culture, or some other core value, then leading with yet another checklist of apps or tools is like a great restaurant hyping its utensils and dinner plates.
It kinda makes no sense.
Enjoy the weekend.