Home Real Estate Getting On the Cluetrain, No. 1

Getting On the Cluetrain, No. 1

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(Image from Flickr.com, by MarkyBon)

There must be some sort of a zeitgeist (literally, “time spirit”) going around the RE.net, like some sort of a benign virus, on the topic of “Web 2.0” — what it is, what it is not. I just posted on Web 2.0, only to see Louis Cammarosano from HomeGain, and then Ardell from RCG post some very interesting thoughts on Web 2.0. That we are all thinking similar types of thoughts must mean some sort of a collective subconscious about Web 2.0 and what it means in the real estate context.

In my previous post, I mentioned the Cluetrain Manifesto, and my belief that Web 2.0 is really nothing more than a vulgate expression of that document and its insights. The authors actually wrote a book based on the ideas of the Manifesto itself, and the 95 theses. Since the entire thing is available online, I can easily recommend that you read it. Or if you like dead tree versions, you can find a copy here.

Now, considering the Manifesto was written in 1999, and eight years on the Internet is basically a new geological epoch, each reader must update it from his or her own viewpoint. And apply the insights to his or her own situation.

This is just my own personal take on the Cluetrain, and what it means for the real estate industry, both residential and commercial. It isn’t the complete take, of course, as that would take many posts, but just one particular aspect of the Cluetrain and what it might mean for the real estate industry.

I start with this passage from Chapter Six of the book:

Business is being transformed, but not by technology. The Web is simply liberating an atavistic human desire, the longing for connection through talk. That’s the one constant throughout our evolution, from caves to mud huts to open-air bazaars, from city-states to empires, nations, interdependent global powers. We’ve always conversed, connecting to the people of our world in our authentic voices. We connect to ourselves the same way; that’s the mystery of voice.

But part of us still has a deep resistance to the unmanageability of the Web. We keep wanting to contain it within a business model, to build it into our business plans and see it as an yet another “opportunity” for more/cheaper/ faster/better business-as-usual. E-commerce, oh boy! Ka-ching! The sound of the cash register is all too often the sound of attempts to co-opt the Web. To tame it, domesticate it, make it more familiar. To shoot it, stuff it, and mount it in the corporate board room along with the other trophies of corporate conquest.

(emphasis mine)

First, let me say that the book, the manifesto, the whole kit and kaboodle, is written in such a way as to make you want to punch the authors in the face, or kiss them. It is intentionally grandiose in its claims, like any revolutionary tends to be. Eight years after its publication, there’s no doubt that various people have pointed out various ways in which the Cluetrain doesn’t work exactly as the authors may have envisioned. Nonetheless, the ideas, the principles themselves, still matter — and I think they’re still vital.

But I hate the term “Web 2.0” because it is, at its heart, an attempt to tame the forces loosed upon the world by the Internet. For one thing, it focuses attention on the technology side of things too much. For another, so many so-called Web 2.0 initiatives are merely attempts by real estate industristas to impose a particular business model, or work it into the existing framework for doing business, etc.

What so few people seem to understand is just how disruptive “real Web 2.0” (read as, companies getting on the cluetrain) is to this industry. I think Ardell gets that. I’m not sure if Louis does.

For example, Louis writes:

For Re. 2.0 to claim success we need to see people other than conference organizers, a handful of Realtor bloggers, consultants and blogging software providers making money. While Re. 2.0 can claim a fair number of individual successes we are not seeing widespread success.

He’s right, from a certain perspective. If you want to preserve the business practices of real estate as they are today, but “leverage” Web 2.0 technology, then I think I can safely predict that RE 2.0 will be a resounding failure.

On the other hand, if you accept that “Web 2.0” is just shorthand (although a horrifically bad one) for Cluetrain… then for RE 2.0 to claim success, we need to see existing real estate companies go out of business in droves, as they fail the harsh test of evolution. Adapt, or Die.

Let me give just one example of Cluetrain thinking vs. Current thinking, as illustrated by a point that Louis raises:

In contrast, buying or selling a home is not a social event. It is a very personal transaction that most home buyers and sellers would prefer to keep private.

The same type of qualified social network that exists for reviews of movies and restaurants does not for real estate. The average person may have seen a fair number of movies and eaten at a great number of restaurants, but most people have not bought or sold many houses, so their opinion on the home selling and buying process is far less qualified than that of a professional Realtor who has participated in dozens of real estate transactions. While, what Charlie from Arkansas may think about a particular movie may be relevant, his views on buying and selling homes are probably less so.

Again, I have to take pains to point out that Louis is absolutely, 100% correct, as things stand today. Buying or selling a home is not a social event. Sellers want to make sure they get the highest price for the most important investment of their life. Buyers want to get the best possible deal on the best possible house for the biggest financial responsibility that most of them will take on.

Again, in the current business model, the opinion of some yahoo on whether a home is fair or unfairly priced is useless next to a professional realtor (with or without the big R) who has been in the market for years.

But look at things from a cluetrain perspective. Markets are conversations — where are conversations happening around real estate, around the act of buying or selling a home?

One place that we know it is happening is around things like community information. (Okay, so I happen to have some inside knowledge on the truth of that; suffice to say that a great deal of the conversations are happening between individuals about neighborhoods and schools and so forth.) Here is but one example.

That’s open, uncensored communication between human beings, empowered by the Internet. And you know what? If I were moving to Chicago, I would find that conversation immensely interesting and possibly even educational. Look at this comment/post by one “nancy davidson”:

Also Edgewater is not that great of an area. It might have a lot of cheap condos; but, it also has gangs that hang around Thorndale and Bryn Mawr. My husband and I lived in Edgewater for around fifteen years and would never move back there.

A nice area in Chicago is Budlong Woods. It has mostly homes; but, there are some condos too. Unfortunately the high school, “Mather” used to be top rated but not anymore if you have high school kids.

In fact all schools in Chicago are bad except for the elite schools like Payton and Whitney Young. Another nasty topic. Thank goodness my son doesn’t need to attend Chicago schools anymore. He graduated from Kenwood in 89 – great when he went there but look at it now.

Now, ask yourself… can you imagine a Realtor saying this publicly on a blog? When was the last time you went to a real estate website and found out that a neighborhood has a gang problem?

Cluetrain Manifesto talks about this exact phenomenon. People inside companies know things, and want to communicate them, and join the conversation that’s going on. The companies themselves, by trying to control the conversation, by trying to “market”, by trying to “position” things, are screwing it up.

Fact is, a real estate agent in Chicago might know all of the ins and outs of gang activity in Edgewater. She might be able to add tremendous value by talking about which schools are great, and which are horrible and should be avoided. Open, honest conversation.

Alas and alack, I confess I’m not able to summon up a scenario in which real estate agents are free to discuss in such an open manner. First, any such agent would likely get fired by the broker. Second, even if she’s an independent, or a Broker herself, she may find herself getting picked up for “steering” and “redlining” and such.

The joke on all of us is that the consumer is going to find out. They’re going to communicate with each other. The Internet empowers people, and makes honest conversation possible. Real Estate, as it currently works, has structural problems with honesty and openness.

If we’re talking about “real Web 2.0”, we need to start there. Can the industry get on the cluetrain? Or are we doomed to be stuck in obviously laughable language about whether a property is a total piece of crap disaster, or a “fixer upper”? A neighborhood is gang-ridden and dangerous, or “up-and-coming”?

So while I agree 100% with what Ardell said, I also think it’s necessary to go deeper. She wrote:

We cannot create WEB 2.0. We can only create an environment for WEB 2.0 to thrive in, so those commenting can create WEB 2.0 by the value added via their comments.

They, both the named and the anonymous commenters, are WEB 2.0. Not us.

Until agents and lenders and industry practitioners and vendors of services to agents, understand that “mutually maximizing collective intelligence and added value for each participant by formalized and dynamic information sharing and creation.” is NOT about what THEY SAY in the post itself, but what they learn from those commenting on what they say, in particular from those who add more to the info in the post and often those who disagree with the information in the post, there will be blogwars.

Change never happens without disruption, Rome wasn’t built in a day and rarely do more than 20% ever “get it” at all. Most will stop even trying to “get it” at the point where they find a way to make money off of it. That’s how innovative principles become “buzz” words only, because the buck stops there.

She’s absolutely right that “Web 2.0” is not a blog, or what an agent says, but the creation of a space for conversation. However, she doesn’t address the extent to which this change is disruptive for the real estate industry.

If “Web 2.0” is really a shorthand for “Cluetrain technology”, then the role and place of the real estate professional is not yet set in the conversation the market (aka, people) is having about real estate. Not enough of us speak openly, honestly, and as human beings. Some of us don’t even think about human beings as human beings, but rather as “leads” or “prospects” or what-have-you.

Imagine breaking that paradigm. Then imagine what the real estate industry, and the practice of brokerage, looks like post-apocalypto when people are having wide-open conversations about this house or that house, this neighborhood or that one. Now where is the Realtor in that conversation?

Rome wasn’t built in a day — but we’re living through the Diocletian period of Rome, not the founding of it. The Old Order must fall, and Rome must be sacked by barbarians, before a new city can rise in its place.

The barbarians are not only coming, they’re here already. And they’re not other real estate agents, or websites, or community portals, or any such thing. They’re people, liberated by the power of the Internet, having unfettered conversation.

Our choice in the long-run, as I see it, is to get on the cluetrain, or get run over by it.

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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