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Vacation!

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Just a brief note to let you know I’ll be on vacation until heading out to RE Blog World on Thursday.  So posting will be light or non-existent.  It’s hard to find the Internet up here in the mountains. 🙂

-rsh

Zillow's Newspaper Gambit: A Possible Parallel

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Eric Blackwell of Bloodhound picks up on this story that Zillow has entered into a relationship with a number of newspapers and asks a series of pointed questions. The comments section has some hot and heavy action going on therein, and it makes for an entertaining read.

I saw this deal cross the news earlier as well, and thought it was interesting on many fronts. For one thing, unless I’m very mistaken about the nature of the deal, it simply means a co-marketing arrangement where the partners simply add ammunition to their sales teams:

The agreement expands the network to include display non-real estate related advertising. Greg Schwartz, vice president of advertising sales at Zillow, said the Web site will focus on “moving-specific” advertisers like home improvement and furniture companies in search of national coverage. Meanwhile, newspapers, such as the San Francisco Chronicle, for example, can offer a furniture retailer additional coverage through Zillow’s San Francisco channel.

So a ad sales guy sitting in the LA Times office can sell a million impressions on Zillow.com, and a Zillow sales person can sell Home Depot on a package deal of Zillow ads plus say 150 newspaper ads.

It isn’t clear whether this covers only online, or print also, but either way, all we’re talking about here is a “Hey, you can sell my stuff, and I can sell yours” deal. Makes a lot of sense to me without a tremendous amount of downside.

Now, David G. from Zillow goes on to say in the comments of the Bloodhound post above that:

Today’s announcement relates to a large advertising network advertising for reaching real estate consumers but there are also technology and content aspects to these partnerships. Later this year, Zillow will begin to power the online real estate sections of our newspaper partners’ websites. And listing content is already pushed to Zillow via newspapers that are selling featured listings on the site.

This tidbit is interesting as well. Because as it happens, there is an almost exact parallel on this play that might prove illuminating (or not).

Cityfeet.com did this exact play in commercial real estate a few years ago. They went out and signed up newspaper partners, powering the online real estate sections of these newspapers for commercial real estate search. I’m guessing that Cityfeet couldn’t get the online residential real estate sections, because those were too closely connected to major revenue centers for the newspapers. That Zillow was able to wrest those away from the newspapers is extraordinary. And extraordinarily interesting as commentary about the newspaper business.

It appears that newspapers are headed for some sort of a cliff.

Thats a double black-diamond slope, son!
That's a double black-diamond slope, son!

The news industry is panicking, to say the least:

The new bad news is the decline in online revenues.

In the best of times, online never contributed more than 10% of most publishers’ total revenues, but with double-digit growth, it was the sole bright spot in the middle years of the decade, holding the promise that interactive revenues might some day make up the losses on the print side.

Unfortunately, most of the growth in the online revenues was due to “up-sells” from print classified listings. As the volume of print listings declines at an ever-faster pace, that means there are fewer opportunities for online “up-sells.”

Considering that real estate advertising in newspapers fell by a whopping 36% in Q2, if online advertising also fell for newspapers, it isn’t clear that there is a sustainable business here for the dead-tree media companies.

So… Cityfeet couldn’t wrest away residential real estate sections from newspapers. Zillow did. In large part, this is because Zillow is many times larger and better funded than Cityfeet ever was.

However, let’s pause a moment and consider this.

  • Newspapers lose 36% of real estate ad sales.

  • Newspapers lose online ad sales for first time in years.

  • Newspapers do a deal with Zillow that is essentially “We take 50% commission for selling your ad space, Zillow.”

  • Zillow stands ready to “power newspaper real estate sections” — meaning all of that traffic probably goes to Zillow.

This looks like a total abdication of the real estate space by the newspaper industry, at least to me.

While that’s a big win for Zillow, I have to sound a cautionary note.

Cityfeet, you see, sputtered along for a couple of years before getting bought by Loopnet for $15m. (Since Cityfeet at the time boasted 100 newspaper relationships, including the big names like New York Times, Boston Globe, and the like, that means each relationship was worth about $150,000. Maybe. It isn’t yet clear that Loopnet has made back its $15m investment in Cityfeet.) The reason, quite simply, was that the brokers and agents who listed on Cityfeet were not seeing a lot of traction. Newspaper readers and newspaper website visitors tend not to be serious consumers for commercial real estate.

Now, given the differences between commercial and residential real estate, this may not be a problem for Zillow. 80% of commercial buyers/lessees do not start their search on the Web, for one example. But this should sound some warning gongs:

“This partnership allows advertisers with our papers to reach not only local real estate consumers who live in particular markets, but also consumers who may be moving to particular markets, via their searches on Zillow.com,” Lincoln Millstein, senior vice president of Hearst Newspapers, said in statement. “This is a significant opportunity for advertisers to target a very large number of consumers on the verge of major home-related commerce.”

Um, Lincoln… I don’t know how to break this to ya but… I doubt that visitors to Zillow.com can be described as being “on the verge of major home-related commerce.” Maybe Zillow has statistics that prove me wrong, which I would welcome, but going to a Zillow or Trulia or any of the major consumer real estate websites strikes me as merely the first step in a fairly long journey that may or may not end in “major home-related commerce”. If by “being on the verge”, Lincoln Millstein meant “within three to six months” then his expectations are properly set. If he means more like, “a matter of weeks”, I think he might be disappointed.

And his advertisers might be disappointed. Will consumers remember seeing some ad for a mortgage product on Zillow.com three months later as they’re finally sitting down with their realtor and going over mortgage paperwork? I really, really doubt that one.

As with all prognostications, I might be dead wrong on this one. But all in all, I’m not sure I see this major win here that the newspapers and Zillow would like us to see. Time will tell, but the trends are not encouraging for either party.

-rsh

Zillow’s Newspaper Gambit: A Possible Parallel

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Eric Blackwell of Bloodhound picks up on this story that Zillow has entered into a relationship with a number of newspapers and asks a series of pointed questions. The comments section has some hot and heavy action going on therein, and it makes for an entertaining read.

I saw this deal cross the news earlier as well, and thought it was interesting on many fronts. For one thing, unless I’m very mistaken about the nature of the deal, it simply means a co-marketing arrangement where the partners simply add ammunition to their sales teams:

The agreement expands the network to include display non-real estate related advertising. Greg Schwartz, vice president of advertising sales at Zillow, said the Web site will focus on “moving-specific” advertisers like home improvement and furniture companies in search of national coverage. Meanwhile, newspapers, such as the San Francisco Chronicle, for example, can offer a furniture retailer additional coverage through Zillow’s San Francisco channel.

So a ad sales guy sitting in the LA Times office can sell a million impressions on Zillow.com, and a Zillow sales person can sell Home Depot on a package deal of Zillow ads plus say 150 newspaper ads.

It isn’t clear whether this covers only online, or print also, but either way, all we’re talking about here is a “Hey, you can sell my stuff, and I can sell yours” deal. Makes a lot of sense to me without a tremendous amount of downside.

Now, David G. from Zillow goes on to say in the comments of the Bloodhound post above that:

Today’s announcement relates to a large advertising network advertising for reaching real estate consumers but there are also technology and content aspects to these partnerships. Later this year, Zillow will begin to power the online real estate sections of our newspaper partners’ websites. And listing content is already pushed to Zillow via newspapers that are selling featured listings on the site.

This tidbit is interesting as well. Because as it happens, there is an almost exact parallel on this play that might prove illuminating (or not).

Cityfeet.com did this exact play in commercial real estate a few years ago. They went out and signed up newspaper partners, powering the online real estate sections of these newspapers for commercial real estate search. I’m guessing that Cityfeet couldn’t get the online residential real estate sections, because those were too closely connected to major revenue centers for the newspapers. That Zillow was able to wrest those away from the newspapers is extraordinary. And extraordinarily interesting as commentary about the newspaper business.

It appears that newspapers are headed for some sort of a cliff.

Thats a double black-diamond slope, son!
That's a double black-diamond slope, son!

The news industry is panicking, to say the least:

The new bad news is the decline in online revenues.

In the best of times, online never contributed more than 10% of most publishers’ total revenues, but with double-digit growth, it was the sole bright spot in the middle years of the decade, holding the promise that interactive revenues might some day make up the losses on the print side.

Unfortunately, most of the growth in the online revenues was due to “up-sells” from print classified listings. As the volume of print listings declines at an ever-faster pace, that means there are fewer opportunities for online “up-sells.”

Considering that real estate advertising in newspapers fell by a whopping 36% in Q2, if online advertising also fell for newspapers, it isn’t clear that there is a sustainable business here for the dead-tree media companies.

So… Cityfeet couldn’t wrest away residential real estate sections from newspapers. Zillow did. In large part, this is because Zillow is many times larger and better funded than Cityfeet ever was.

However, let’s pause a moment and consider this.

  • Newspapers lose 36% of real estate ad sales.

  • Newspapers lose online ad sales for first time in years.

  • Newspapers do a deal with Zillow that is essentially “We take 50% commission for selling your ad space, Zillow.”

  • Zillow stands ready to “power newspaper real estate sections” — meaning all of that traffic probably goes to Zillow.

This looks like a total abdication of the real estate space by the newspaper industry, at least to me.

While that’s a big win for Zillow, I have to sound a cautionary note.

Cityfeet, you see, sputtered along for a couple of years before getting bought by Loopnet for $15m. (Since Cityfeet at the time boasted 100 newspaper relationships, including the big names like New York Times, Boston Globe, and the like, that means each relationship was worth about $150,000. Maybe. It isn’t yet clear that Loopnet has made back its $15m investment in Cityfeet.) The reason, quite simply, was that the brokers and agents who listed on Cityfeet were not seeing a lot of traction. Newspaper readers and newspaper website visitors tend not to be serious consumers for commercial real estate.

Now, given the differences between commercial and residential real estate, this may not be a problem for Zillow. 80% of commercial buyers/lessees do not start their search on the Web, for one example. But this should sound some warning gongs:

“This partnership allows advertisers with our papers to reach not only local real estate consumers who live in particular markets, but also consumers who may be moving to particular markets, via their searches on Zillow.com,” Lincoln Millstein, senior vice president of Hearst Newspapers, said in statement. “This is a significant opportunity for advertisers to target a very large number of consumers on the verge of major home-related commerce.”

Um, Lincoln… I don’t know how to break this to ya but… I doubt that visitors to Zillow.com can be described as being “on the verge of major home-related commerce.” Maybe Zillow has statistics that prove me wrong, which I would welcome, but going to a Zillow or Trulia or any of the major consumer real estate websites strikes me as merely the first step in a fairly long journey that may or may not end in “major home-related commerce”. If by “being on the verge”, Lincoln Millstein meant “within three to six months” then his expectations are properly set. If he means more like, “a matter of weeks”, I think he might be disappointed.

And his advertisers might be disappointed. Will consumers remember seeing some ad for a mortgage product on Zillow.com three months later as they’re finally sitting down with their realtor and going over mortgage paperwork? I really, really doubt that one.

As with all prognostications, I might be dead wrong on this one. But all in all, I’m not sure I see this major win here that the newspapers and Zillow would like us to see. Time will tell, but the trends are not encouraging for either party.

-rsh

Speaking of Ogilvy…

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I’ve referenced David Ogilvy, the founder of Ogilvy & Mather, a number of times.  His book, Confessions of an Advertising Man, is one of the wittiest and yet most influential books I have read.  I recently ran across a webpage of “Ogilvyisms” — sayings and quotes from David Ogilvy — that I found absolutely fascinating.  So much of what he writes about the advertising business can and should apply directly to real estate.  Here are my selections:

Don’t bunt. Aim out of the ball park. Aim for the company of immortals.

A lot of today’s campaigns are based on optimum positioning but are totally ineffective – because they are dull, or badly constructed, or ineptly written. If nobody reads your advertisement or looks at your commercial, it doesn’t do you much good to have the right positioning.

Most readers look at the photograph first. If you put it in the middle of the page, the reader will start by looking in the middle. Then her eye must go up to read the headline; this doesn’t work, because people have a habit of scanning downwards. However, suppose a few readers do read the headline after seeing the photograph below it. After that, you require them to jump down past the photograph which they have already seen. Not bloody likely.

No sale, no commission. No commission, no eat. That made an impression on me.

We exist to build the business of our clients. The recommendations we make to them should be the recommendations we would make if we owned their companies, without regard to our own short-term interest,” he said. “This earns their respect, which is the greatest asset we can have.

You wouldn’t tell lies to your own wife. Don’t tell them to mine.

We prefer the discipline of knowledge to the anarchy of ignorance. We pursue knowledge the way a pig pursues truffles.

Great hospitals do two things. They look after patients, and they teach young doctors. We look after clients, and we teach young advertising people.

If we hire people who are smaller than we are, we will become a company of dwarfs. If we hire people who are larger than we are, we’ll become a company of giants.

The top man has one principle responsibility – to provide an atmosphere in which creative mavericks can do useful work.

Set exorbitant standards, and give your people hell when they don’t live up to them. There is nothing so demoralizing as a boss who tolerates second rate work.

I can’t stand callow amateurs who aren’t sufficiently interested in the craft of advertising to assume the posture of students.

Training should not be confined to trainees. It should be a continuous process, and should include the entire professional staff of the agency. The more our people learn, the more useful they can be to our clients.

We like people who are honest. Honest in argument, honest with clients, honest with suppliers, honest with the company — and above all, honest with consumers.

Advertising is a business of words, but advertising agencies are infested with men and women who cannot write. They are as helpless as deaf mutes on the stage of the Metropolitan Opera.

It is the inescapable duty of management to fire incompetent people.

The best ideas come as jokes. Make your thinking as funny as possible.

The more informative your advertising, the more persuasive it will be.

Advertising is a business of words, but advertising agencies are infested with men and women who cannot write. They cannot write advertisements, and they cannot write plans. They are helpless as deaf mutes on the stage of the Metropolitan Opera.

The more prospects you talk to, the more sales you expose yourself to, the more orders you will get. But never mistake quantity of calls for quality of sales-manship.

Always hold your sales meetings in rooms too small for the audience, even if it means holding them in the WC. ‘Standing room only’ creates an atmosphere of success, as in theatres and restaurants, while a half-empty auditorium smells of failure.

I don’t know about you, but these words are like Mentos thrown into the Diet Coke of my brain.

-rsh

Reflection on Productivity

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I thought Glenn Kelman’s latest post on Yammer was a treat — it’s rare for those of us in the management ranks to get management insights and thoughts from a CEO that aren’t prepackaged and heavily worked over by a legion of editors. The post is ostensibly about Yammer, the new corporate Twitter, but it’s really about how to manage people to be productive:

While I am glad to try a new technology — Dan is such a fearless pioneer — I worry that Yammer might be worse than work, and worse even than no-work. At least when you’re browsing ESPN.com, you feel bad about it. Yammer happens at work, and it sounds like work — you can always tell when someone is writing an email, IM or Twitter, because their typing is so much faster and noisier — so people think it is work, with one crucial exception: it may not get work done.

I’m not sure I buy the talk about collaboration. I’ve seen passive-aggressive arguments happen over email and (less over) IM — Skype’s workrooms are the exception; they’re awesome — that could have been avoided or settled in a few minutes face to face; will Yammer be much different?

As it is, I have elaborate fantasies about outlawing the whole Internet for hours at a time, or even for an entire workday. When I marvel at how a historical colossus like Theodore Roosevelt (definitive naval history of 1812, four-volume history of American frontier, a staggering number of slaughtered animals, U.S. President) or Honore de Balzac (dozens of coffee-fueled novels, written from midnight – 3 in the afternoon, while standing up) had time to accomplish so much, I usually attribute it to talent, servants — and no Internet.

I have to struggle with this issue as well, on a daily basis. Especially when overseeing the corporate blog is part of my responsibility, and a task for my team. The product management team has to be on the Internet constantly, looking at developments, reading blogs, interacting with people both inside and outside the company. And now, we’re in week two of the NFL season, which means fantasy football will undoubtedly eat into my productivity (and my team’s productivity).

Thinking about Yammer, about Twitter, about blogs, about all these “is it work?” type of tools reminds me of David Ogilvy, who built Ogilvy & Mather into an advertising giant. One of his observations has to do with brilliant creative people:

There are very few men of genius in advertising agencies. But we need all we can find. Almost without exception they are disagreeable. Don’t destroy them. They lay golden eggs.

He writes about how he always thought better and more creatively after a few drinks. He talks about how he has to coddle the borderline-unstable personalities of his best copywriters, because they are the ones that produce the best work.

I think managing people is by far the most difficult thing that any person can do. I have enormous respect for great managers, whether they be Jack Welch or David Petraeus. It is so difficult. But there appears to be a common thread among the great managers: insistence on results.

That’s the nature of business, at the end of the day. It is what makes business fun: you have winners and losers, and a scoreboard. Is Yammer going to destroy productivity? Perhaps. But then the work of your people will reflect that destroyed productivity. Are my people wasting too much time on the Internet? Then they will not be able to deliver what I expect.

In my management philosophy, I find that I am more and more going with the following approach:

Do whatever you want, whenever you want, however you want — but I don’t want to hear any goddamn excuses.

I’m not all that great at enforcing this, but I’m getting better. If you need to take a day off, take it. If you need to leave early, leave early. Come in at noon, that’s fine with me. Spend half the day playing video games? That’s okay too. But miss a deadline, or fail to deliver results, and it’s your ass. I am not interested in excuses. At all.

I have never seen an excuse raise revenues by a dollar, or cut costs by a penny.  Never.  I have never seen excuses get a product to market.  I have never seen competitors willing to wait on us because we have a great excuse why we didn’t do what we needed to do.

I suspect that at the end of the day, this is the key to productivity: the absolute unwillingness to entertain excuses coupled with freedom to let people be productive in their own way.  Some people concentrate for an hour, but then need to take a breather.  Others need to maintain a low-level focus for the whole day.  Still others might need to get stinking drunk to be creative.  Each individual is different.

What remains the same are results.

So my unsolicited, probably horrid, advice to Glenn is to let people Yammer away, check ESPN, play fantasy football, do whatever it is they gotta do.  But never, ever accept an excuse for failure.  Ever.  I think the unproductive people will hang themselves on the rope provided, while others will make lassos out of the rope and bring in more business.

-rsh

Zipvo Revisited: Zipvoplatinum, Business Models, and a Q&A

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Greg Afarian of Zipvo.com was kind enough to alert me in the comments section of my original post on Zipvo that they are about to announce Zipvo Platinum:

I wanted to get back to you about our “incredibly flawed business model”. We are revealing http://zipvoplatinum.com/ after MANY months of production. We have kept ZIPVO Platinum a secret and because of this we were NOT able to comment on business models at that time. Unfortunately, that whole ads in video and ads in places on the site was a smoke screen to avoid the subject. (sorry about that) We feel that we have a revolutionary product that will change the way Real Estate is found, viewed, shared, and marketed on-line.

As I thought originally that the guys from Zipvo appeared to be really nice, really smart people, I’m glad to hear that maybe I wasn’t seeing the true story of Zipvo. It was kept a secret. 🙂

So the real Zipvo is apparently “a revolutionary product that will change the way real estate is found, viewed, shared and marketed online.” Cool. Let us begin the diving.

Except that there isn’t much to dive into, at least based on what has been released/leaked thus far:

Zipvo Platinum Products
Zipvo Platinum Products

Clicking on any of those product buttons takes you to the announcement, instead of any in-depth information about each of the products.

Judging by the front-page of Zipvo Platinum, there are two more mysteries to be unveiled soon, so that will be something.

All of those are very nice, but they do not answer my fundamental critique: How will Zipvo make money?

Presumably, if the “ads on the bottom of the page” was just a smokescreen, then with these products, Zipvo is going to adopt some non-advertising business model. That means either (a) subscription of some sort, or (b) lead sales, (c) data sales, or (d) some new model that has yet to be invented.

To answer these questions, I emailed Greg. The following is from that exchange, posted with his permission.  I will be commenting after each Q&A with my $0.02 on the matter.

Q: Business Model – My original critique had to do almost entirely with the flawed advertising-supported model, which apparently was just a smokescreen. 🙂  So… what IS your actual business model here?  Subscription?  Software sales?  Support contracts?

Greg: Yes, our original “business model” was a smokescreen to cover what we were working on behind the scenes. We will still have advertising opportunities on ZIPVO, but our primary business model will be subscriptions to ZIPVO Platinum, licensing agreements, and technical support for our products.

This is honestly a much better business model generally speaking.  However, it now gets interesting, because the issue will now be 100% be whether the products being offered are seen as being worth the price being charged.  All of the ‘free’ models avoid this thorny issue, which is why they are so popular despite being so weak.  Furthermore, since I happen to be working at a company with a subscription/licensing based model myself, I have to point out that Zipvo’s sales team will now become a focal point.

Q: Listings flyers – Seems to me there are a fairly large number of companies offering this.  What makes your product so different?

Greg: Our listing flyers are not necessarily revolutionary. PDF flyers can only go so far. One feature we will be adding is clickable hotspots on the PDF flyer that link back to the listing site. Also, our listing flyers are easy to use. Simply click a button and you get a professional looking listing sheet that includes your photo, logo, listing information, listing photos, and an easy to remember link where customers can go to view your video, more information, etc. That link is also viewable on the iPhone. These flyers are in PDF format so they can easily be printed and emailed.

Meh.  Clickable hotspots on a PDF flyer.  As Greg himself notes, this is hardly revolutionary.

Q: Online address book – Again, seems to me that there are a number of these things out there already.  What differentiates your product?  Very pertinent to this question is if you can answer why you believe agents and brokers would be willing to put their customer data on your site.  What sorts of privacy, data protection, and data ownership features will you be offering?

Greg: There are other address book solutions out there, and much like our other products one great feature is the ease of use and coupling with all your other online marketing needs at ZIPVO. With ZIPVO you can easily connect with business associates and customers. Your ZIPVO Address Book can be used to let your contacts know about a new listing, blog post, or anything else you want to announce with just the click of a mouse. We will also have a “Subscribe to My Updates” feature that allows ZIPVO Platinum users to put a link in their blogs, profiles, video pages, so interested users can automatically be added to their address book, much like a newsletter. We will be integrating a WYSIWYG system so agents can easily create professional-looking HTML emails.

As for privacy, our systems are very secure and all of our login information is encrypted. We backup our site daily so data loss is never an issue. We will also allow agents to download a copy of their address book in CSV format for their own backups. ZIPVO will never contact agents stored contacts, nor will we sell that information. The address book entries are owned by the agents who enter them. If a user decides they no longer want their contacts stored on ZIPVO we will gladly delete the data forever.

I am glad to hear that Zipvo is going to put in strong data security measures for their online addressbook.  But really, what they need to be thinking about is auto-sync.  I’ve had a lot of experience with these sorts of systems from my time at Coldwell Banker Commercial, as these kinds of document-creation and marketing systems are all the rage in commercial real estate, and one of the trickiest things we ran into was the simple fact that most people do NOT want to maintain three or four different client databases.

Without auto-sync, which is not at all easy to do, these online addressbook solutions become yet-another-data-entry nightmare.

Seriously, I hope the Zipvo guys are already thinking about this, and have very easy, very simple auto-sync — and I mean auto-sync, not “download a file in CSV and upload to whatever” — solutions in the works.

Also, WYSIWYG system for the agents is a great idea.  But again, based on my experience, Zipvo should seriously be looking at bringing in office admins instead of agents.  When I deployed a similar system at CBC, what I found was that no matter how much education and training were provided, agents simply did not want to spend time making flyers and HTML emails.  They wanted their admins to do it for them.  Things might be different in residential real estate, but I doubt it.

Differentiation will also be a real issue — how the heck do you differentiate yourself using templated designs?  It’s awfully hard to do.

Q: Singe property websites – People are already doing this, so presumably, the product will offer some value that they are unable to access by themselves.  What is that value?

Greg: Single property websites are nothing new, and have certainly caught on over the last few years. We have three points we feel make ours unique. First, we offer a domain registration service where you can instantly register a domain such as 123mainstreet.com for your single property site. Second, the single property sites are under the umbrella of ZIPVO so our powerful analytics will track how people are finding them, how long they’re staying, and what they click on while they’re there. Third, your videos will instantly embed on your single property sites with a non-branded player. No embed code needed.

This section right here tells me that Zipvo is likely to be aiming at the agent/small-brokerage market.  If single property sites are under the umbrella of Zipvo, then all that consumer traffic is going to some “videos.zipvo.com/123mainstreet” type of URL.  An enterprise brokerage that has an interest in growing traffic to its own site is not going to find this all that appealing, no matter how powerful the analytics. (See below on this point.)

That isn’t bad in and of itself, but getting a subscription/software licensing/support contract type of business model understood by that market segment is going to be something of a challenge.

It might make sense for Zipvo here to figure out a way to let the client host all of these websites as a part of the main client website — maybe a software appliance type of an approach?  I simply can’t imagine NRT deciding to send all the traffic to its single property websites to some other company (to be monetized via advertising, no less), for just one example.

Q: Analytics – Google Analytics is free, and really good.  Why would someone use your analytics?  What are the mechanics involved — javascript?  Log analysis?  server-side analysis?

Google Analytics is undoubtedly one of the best solutions out there, but is only good for agents with some technical skills and limits them to tracking only their own websites. ZIPVO Analytics tracks all of the activity on ZIPVO.com from blog views, profile views, video views, time spent on pages / videos, how they got there, and what they clicked on while on a page. Much like Google Analytics it’s a JavaScript based system but requires zero technical skills by the agent. We will also be integrating server-side analysis in future releases.

This is interesting on three fronts.

First, I hope that Zipvo is going to build API’s or some other way to hook into existing analytics packages.  Even if we’re talking about an individual agent or small brokerage without the technical skills, people are going to want to look at analytics as a whole.  It simply makes no sense to have to login to one system to find out how the traffic to my company website is, then to have to go check Zipvo Analytics to see how the traffic to my video and my profile views and such are.

Second, if it’s a javascript-based system, I wonder how they’re doing the unique tracking pixels.  That sounds like an interesting bit of technology — to auto-embed the unique identifier of the client into all of the pages/video.

Third, I wonder how Zipvo is doing the “time spent on video” metric, and whether they can spot jump-off points inside a video.  In other words, if I have a 3 minute video, can I find out that 80% of the users leave at the 1:36 mark on the video?  That would be cool, but I’d love to know how they’re tracking that.

Q: What are the mystery products you have yet to unveil? 🙂  How do they change the equation of the above four?

Our two mystery products are PhotoVideo+ and ZIPVO Video Editor.

PhotoVideo+ allows agents to enhance their PhotoVideos with music, text descriptions of the photos and rearranging the order of photos. The end result is much like the virtual tours that exist today, but the process to get there has been simplified. Unlike some, our PhotoVideos are indexed by Google, embeddable, and are listed in the ZIPVO search directory.

ZIPVO Video Editor is an online editing system that allows agents to edit videos with ease and requires no software to download. In technical terms it’s a non-destructive Flash based system that requires no rendering time when cutting together video clips, photos, and music. Simply upload your videos and photos and you can easily create a professional looking video. The user interface looks like iMovie or Windows Movie Maker and is entirely drag / drop. It’s very easy to use and there is hardly any learning curve. It was based on the needs of real estate video.

I don’t know what a PhotoVideo is, so I probably shouldn’t comment too much.  It sounds like a cool piece of technology though, especially to get indexed by searchbots.

The Video Editor, however, is seriously cool.  Seems to me if it’s really that easy and that powerful, Zipvo should just go after the far larger personal video editing market.  I know I spent hundreds of dollars on video editing software — if I can just do that online, I’d do it in a non-destructive flash.  (Okay, sorry about that… really.)  Thing is, video processing takes enormous CPU/memory on a desktop — I’d have to see this online version work to believe it.  A 5 minute video on my Canon Vixia is like 4GB.  Uploading that over the Internet will take how long?  Processing HD video is going to take how long?

If Zipvo has solved those issues via online video editing… wow.  That’s incredibly cool.

Q: What is REVOLUTIONARY about this product or set of products?  REVOLUTIONARY implies a total paradigm shift — a process of creative destruction.  So who/what will you be destroying?

ZIPVO Platinum is revolutionary for a number of reasons. We provide new and existing solutions to agents, at a much more affordable cost with much better products. There is no longer a need to visit 5 different websites when you have a new listing. ZIPVO Platinum provides a full solution for an agents online marketing needs.

We built our product based off of what our users were asking us for and kept ease of use in mind at every stage of development. We will constantly be releasing new features that make our products even better based on changes in technology, the market, and user feedback.

We put our users first, and everything we develop is based on what they want and need. We even go so far as visiting offices to teach the agents how to use ZIPVO and other forms of social media as it pertains to real estate.

We will be destroying all of the existing companies out there that only offer a fraction of what we do. By using ZIPVO Platinum as your online marketing solution you gain powerful tools at a fraction of the cost. ZIPVO Platinum is ten times better and costs ten times less.

Traditional print media is a dying breed and with today’s technically savvy, instant gratification consumers, an online marketing campaign is essential to success. Marketing yourself and your properties online with powerful tools such as video, blogging, and social media saves an agent both time, money and increases productivity.

You have to love Greg for his enthusiasm — if he didn’t feel passionate about Zipvo, it’s unlikely that he would have devoted so much time and energy into the project.

At the same time… all of the products strike me as evolutionary change.  Perhaps the Video Editor, if it works quickly, is a real game-changer, but the rest of the products are things we all have seen already.  And the Video Editor is way way beyond known technology capabilities, so… color me skeptical until I see it in action digesting a 5GB upload over the Internet, then working with it real-time in Flash.  The real promise here appears to be that Zipvo will simply do them better, and cheaper, and do a better job of listening to its customers.  That is always possible, of course. 🙂

The ‘no longer need to visit 5 websites’ is a bit of a stretch, seeing as how the reason why you don’t need to visit 5 different websites is that all of your online marketing will be done through and on Zipvo.com.  Sure, if you’re willing to outsource all of your online marketing, that can be done pretty easily.  But if you already have invested in a company website, have listings syndications setup, then I’m not so sure that applies.

Conclusion

My personal conclusion is that Zipvo may indeed be a real improvement in certain areas, at least for the agent and small brokerage market.  Zipvo may be able to bring the power of institutional online marketing down to the independents — if they can do that successfully, and provide enough value, then I can see them getting a bunch of subscribers.

But now they’re playing in the same space as Move, with its Top Producer product.  It’s possible that Zipvo will end up destroying that business in the whole ‘creative destruction’ cycle.  But it’s never a good idea to bet against one of the biggest players in real estate technology.

Only time will tell.  But revolutionary change?  I don’t see it.  Possibly great suite of products, slickly integrated?  It just may be that.  Stronger business model than ad sales?  Without a doubt.

-rsh

Zipvo Revisited: Zipvoplatinum, Business Models, and a Q&A

6

Greg Afarian of Zipvo.com was kind enough to alert me in the comments section of my original post on Zipvo that they are about to announce Zipvo Platinum:

I wanted to get back to you about our “incredibly flawed business model”. We are revealing http://zipvoplatinum.com/ after MANY months of production. We have kept ZIPVO Platinum a secret and because of this we were NOT able to comment on business models at that time. Unfortunately, that whole ads in video and ads in places on the site was a smoke screen to avoid the subject. (sorry about that) We feel that we have a revolutionary product that will change the way Real Estate is found, viewed, shared, and marketed on-line.

As I thought originally that the guys from Zipvo appeared to be really nice, really smart people, I’m glad to hear that maybe I wasn’t seeing the true story of Zipvo. It was kept a secret. 🙂

So the real Zipvo is apparently “a revolutionary product that will change the way real estate is found, viewed, shared and marketed online.” Cool. Let us begin the diving.

Except that there isn’t much to dive into, at least based on what has been released/leaked thus far:

Zipvo Platinum Products
Zipvo Platinum Products

Clicking on any of those product buttons takes you to the announcement, instead of any in-depth information about each of the products.

Judging by the front-page of Zipvo Platinum, there are two more mysteries to be unveiled soon, so that will be something.

All of those are very nice, but they do not answer my fundamental critique: How will Zipvo make money?

Presumably, if the “ads on the bottom of the page” was just a smokescreen, then with these products, Zipvo is going to adopt some non-advertising business model. That means either (a) subscription of some sort, or (b) lead sales, (c) data sales, or (d) some new model that has yet to be invented.

To answer these questions, I emailed Greg. The following is from that exchange, posted with his permission.  I will be commenting after each Q&A with my $0.02 on the matter.

Q: Business Model – My original critique had to do almost entirely with the flawed advertising-supported model, which apparently was just a smokescreen. 🙂  So… what IS your actual business model here?  Subscription?  Software sales?  Support contracts?

Greg: Yes, our original “business model” was a smokescreen to cover what we were working on behind the scenes. We will still have advertising opportunities on ZIPVO, but our primary business model will be subscriptions to ZIPVO Platinum, licensing agreements, and technical support for our products.

This is honestly a much better business model generally speaking.  However, it now gets interesting, because the issue will now be 100% be whether the products being offered are seen as being worth the price being charged.  All of the ‘free’ models avoid this thorny issue, which is why they are so popular despite being so weak.  Furthermore, since I happen to be working at a company with a subscription/licensing based model myself, I have to point out that Zipvo’s sales team will now become a focal point.

Q: Listings flyers – Seems to me there are a fairly large number of companies offering this.  What makes your product so different?

Greg: Our listing flyers are not necessarily revolutionary. PDF flyers can only go so far. One feature we will be adding is clickable hotspots on the PDF flyer that link back to the listing site. Also, our listing flyers are easy to use. Simply click a button and you get a professional looking listing sheet that includes your photo, logo, listing information, listing photos, and an easy to remember link where customers can go to view your video, more information, etc. That link is also viewable on the iPhone. These flyers are in PDF format so they can easily be printed and emailed.

Meh.  Clickable hotspots on a PDF flyer.  As Greg himself notes, this is hardly revolutionary.

Q: Online address book – Again, seems to me that there are a number of these things out there already.  What differentiates your product?  Very pertinent to this question is if you can answer why you believe agents and brokers would be willing to put their customer data on your site.  What sorts of privacy, data protection, and data ownership features will you be offering?

Greg: There are other address book solutions out there, and much like our other products one great feature is the ease of use and coupling with all your other online marketing needs at ZIPVO. With ZIPVO you can easily connect with business associates and customers. Your ZIPVO Address Book can be used to let your contacts know about a new listing, blog post, or anything else you want to announce with just the click of a mouse. We will also have a “Subscribe to My Updates” feature that allows ZIPVO Platinum users to put a link in their blogs, profiles, video pages, so interested users can automatically be added to their address book, much like a newsletter. We will be integrating a WYSIWYG system so agents can easily create professional-looking HTML emails.

As for privacy, our systems are very secure and all of our login information is encrypted. We backup our site daily so data loss is never an issue. We will also allow agents to download a copy of their address book in CSV format for their own backups. ZIPVO will never contact agents stored contacts, nor will we sell that information. The address book entries are owned by the agents who enter them. If a user decides they no longer want their contacts stored on ZIPVO we will gladly delete the data forever.

I am glad to hear that Zipvo is going to put in strong data security measures for their online addressbook.  But really, what they need to be thinking about is auto-sync.  I’ve had a lot of experience with these sorts of systems from my time at Coldwell Banker Commercial, as these kinds of document-creation and marketing systems are all the rage in commercial real estate, and one of the trickiest things we ran into was the simple fact that most people do NOT want to maintain three or four different client databases.

Without auto-sync, which is not at all easy to do, these online addressbook solutions become yet-another-data-entry nightmare.

Seriously, I hope the Zipvo guys are already thinking about this, and have very easy, very simple auto-sync — and I mean auto-sync, not “download a file in CSV and upload to whatever” — solutions in the works.

Also, WYSIWYG system for the agents is a great idea.  But again, based on my experience, Zipvo should seriously be looking at bringing in office admins instead of agents.  When I deployed a similar system at CBC, what I found was that no matter how much education and training were provided, agents simply did not want to spend time making flyers and HTML emails.  They wanted their admins to do it for them.  Things might be different in residential real estate, but I doubt it.

Differentiation will also be a real issue — how the heck do you differentiate yourself using templated designs?  It’s awfully hard to do.

Q: Singe property websites – People are already doing this, so presumably, the product will offer some value that they are unable to access by themselves.  What is that value?

Greg: Single property websites are nothing new, and have certainly caught on over the last few years. We have three points we feel make ours unique. First, we offer a domain registration service where you can instantly register a domain such as 123mainstreet.com for your single property site. Second, the single property sites are under the umbrella of ZIPVO so our powerful analytics will track how people are finding them, how long they’re staying, and what they click on while they’re there. Third, your videos will instantly embed on your single property sites with a non-branded player. No embed code needed.

This section right here tells me that Zipvo is likely to be aiming at the agent/small-brokerage market.  If single property sites are under the umbrella of Zipvo, then all that consumer traffic is going to some “videos.zipvo.com/123mainstreet” type of URL.  An enterprise brokerage that has an interest in growing traffic to its own site is not going to find this all that appealing, no matter how powerful the analytics. (See below on this point.)

That isn’t bad in and of itself, but getting a subscription/software licensing/support contract type of business model understood by that market segment is going to be something of a challenge.

It might make sense for Zipvo here to figure out a way to let the client host all of these websites as a part of the main client website — maybe a software appliance type of an approach?  I simply can’t imagine NRT deciding to send all the traffic to its single property websites to some other company (to be monetized via advertising, no less), for just one example.

Q: Analytics – Google Analytics is free, and really good.  Why would someone use your analytics?  What are the mechanics involved — javascript?  Log analysis?  server-side analysis?

Google Analytics is undoubtedly one of the best solutions out there, but is only good for agents with some technical skills and limits them to tracking only their own websites. ZIPVO Analytics tracks all of the activity on ZIPVO.com from blog views, profile views, video views, time spent on pages / videos, how they got there, and what they clicked on while on a page. Much like Google Analytics it’s a JavaScript based system but requires zero technical skills by the agent. We will also be integrating server-side analysis in future releases.

This is interesting on three fronts.

First, I hope that Zipvo is going to build API’s or some other way to hook into existing analytics packages.  Even if we’re talking about an individual agent or small brokerage without the technical skills, people are going to want to look at analytics as a whole.  It simply makes no sense to have to login to one system to find out how the traffic to my company website is, then to have to go check Zipvo Analytics to see how the traffic to my video and my profile views and such are.

Second, if it’s a javascript-based system, I wonder how they’re doing the unique tracking pixels.  That sounds like an interesting bit of technology — to auto-embed the unique identifier of the client into all of the pages/video.

Third, I wonder how Zipvo is doing the “time spent on video” metric, and whether they can spot jump-off points inside a video.  In other words, if I have a 3 minute video, can I find out that 80% of the users leave at the 1:36 mark on the video?  That would be cool, but I’d love to know how they’re tracking that.

Q: What are the mystery products you have yet to unveil? 🙂  How do they change the equation of the above four?

Our two mystery products are PhotoVideo+ and ZIPVO Video Editor.

PhotoVideo+ allows agents to enhance their PhotoVideos with music, text descriptions of the photos and rearranging the order of photos. The end result is much like the virtual tours that exist today, but the process to get there has been simplified. Unlike some, our PhotoVideos are indexed by Google, embeddable, and are listed in the ZIPVO search directory.

ZIPVO Video Editor is an online editing system that allows agents to edit videos with ease and requires no software to download. In technical terms it’s a non-destructive Flash based system that requires no rendering time when cutting together video clips, photos, and music. Simply upload your videos and photos and you can easily create a professional looking video. The user interface looks like iMovie or Windows Movie Maker and is entirely drag / drop. It’s very easy to use and there is hardly any learning curve. It was based on the needs of real estate video.

I don’t know what a PhotoVideo is, so I probably shouldn’t comment too much.  It sounds like a cool piece of technology though, especially to get indexed by searchbots.

The Video Editor, however, is seriously cool.  Seems to me if it’s really that easy and that powerful, Zipvo should just go after the far larger personal video editing market.  I know I spent hundreds of dollars on video editing software — if I can just do that online, I’d do it in a non-destructive flash.  (Okay, sorry about that… really.)  Thing is, video processing takes enormous CPU/memory on a desktop — I’d have to see this online version work to believe it.  A 5 minute video on my Canon Vixia is like 4GB.  Uploading that over the Internet will take how long?  Processing HD video is going to take how long?

If Zipvo has solved those issues via online video editing… wow.  That’s incredibly cool.

Q: What is REVOLUTIONARY about this product or set of products?  REVOLUTIONARY implies a total paradigm shift — a process of creative destruction.  So who/what will you be destroying?

ZIPVO Platinum is revolutionary for a number of reasons. We provide new and existing solutions to agents, at a much more affordable cost with much better products. There is no longer a need to visit 5 different websites when you have a new listing. ZIPVO Platinum provides a full solution for an agents online marketing needs.

We built our product based off of what our users were asking us for and kept ease of use in mind at every stage of development. We will constantly be releasing new features that make our products even better based on changes in technology, the market, and user feedback.

We put our users first, and everything we develop is based on what they want and need. We even go so far as visiting offices to teach the agents how to use ZIPVO and other forms of social media as it pertains to real estate.

We will be destroying all of the existing companies out there that only offer a fraction of what we do. By using ZIPVO Platinum as your online marketing solution you gain powerful tools at a fraction of the cost. ZIPVO Platinum is ten times better and costs ten times less.

Traditional print media is a dying breed and with today’s technically savvy, instant gratification consumers, an online marketing campaign is essential to success. Marketing yourself and your properties online with powerful tools such as video, blogging, and social media saves an agent both time, money and increases productivity.

You have to love Greg for his enthusiasm — if he didn’t feel passionate about Zipvo, it’s unlikely that he would have devoted so much time and energy into the project.

At the same time… all of the products strike me as evolutionary change.  Perhaps the Video Editor, if it works quickly, is a real game-changer, but the rest of the products are things we all have seen already.  And the Video Editor is way way beyond known technology capabilities, so… color me skeptical until I see it in action digesting a 5GB upload over the Internet, then working with it real-time in Flash.  The real promise here appears to be that Zipvo will simply do them better, and cheaper, and do a better job of listening to its customers.  That is always possible, of course. 🙂

The ‘no longer need to visit 5 websites’ is a bit of a stretch, seeing as how the reason why you don’t need to visit 5 different websites is that all of your online marketing will be done through and on Zipvo.com.  Sure, if you’re willing to outsource all of your online marketing, that can be done pretty easily.  But if you already have invested in a company website, have listings syndications setup, then I’m not so sure that applies.

Conclusion

My personal conclusion is that Zipvo may indeed be a real improvement in certain areas, at least for the agent and small brokerage market.  Zipvo may be able to bring the power of institutional online marketing down to the independents — if they can do that successfully, and provide enough value, then I can see them getting a bunch of subscribers.

But now they’re playing in the same space as Move, with its Top Producer product.  It’s possible that Zipvo will end up destroying that business in the whole ‘creative destruction’ cycle.  But it’s never a good idea to bet against one of the biggest players in real estate technology.

Only time will tell.  But revolutionary change?  I don’t see it.  Possibly great suite of products, slickly integrated?  It just may be that.  Stronger business model than ad sales?  Without a doubt.

-rsh

Discounting, Brand, and Real Estate

27

fail owned pwned pictures


At the recent RISMedia Leadership conference, I walked around listening to the conversation, attending the sessions, and talking to people.  Not suprisingly, the market was very much on people’s minds, and a number of people were talking about pressure on commissions.

That pressure is nothing new, of course.  Discount brokerages have come and gone and stayed and come again.  Rebate models are everywhere on the Web.

In that context, however, I thought it relevant to at least think about this article from MarketingProfs.com:

If your business has experienced a drop in traffic or sales, you may be considering offering discounts to your customers. Sales. Discounts. Markdowns. Perhaps even “Markdown Madness”…?

Offering items at a sale price is a very tempting tactic. In the short term, it drives traffic and sales. What you lose in margin is made up in volume. Problem solved, right?!

Bigger problem, created. What you’re really doing is eroding your long-term margins and your long-term sales. (This is especially true if you run a business based on quality and value versus being a low-price provider.)

The problem with discounts is that customers don’t see the price drop the same way you do.

As a business person, you clearly understand you are temporarily cutting into your own profit to give a little more to the customer and keep their business.

As customers we see it different. The moment you discount, it re-calibrates the perceived value of your products/services. Selling something for $200 today, and discounting for $150 tells us you are making more money on the $200 version… And you’re still making money on the $150 version… so the $200 version was over-priced. The new perceived value, $150.

As a consumer buying something, we get this. As a marketer selling something, we tend to ignore this fact.

I urge everyone to read the whole thing.  It’s really valuable food for thought.

The question at the heart of the post is whether real estate brokerage today is a ‘business based on quality and value’ or a ‘business based on being a low-price provider’.

My sense is that most of the professionals and leaders in the industry think of real estate as a profession based on quality and value.  At the same time, there is this undertow often unspoken (and sometimes spoken) that the brokerage business model is fundamentally broken.

A highly-respected industry executive with a large brokerage flat out told me at the Conference something along the following (paraphrasing bigtime here from memory): “If I sell your house, worth $500K, and collect 3% commission, then I get paid $15,000.  If your house is worth $200K, I only get $6,000.  Do you really think I did $9,000 worth of additional work to sell your $500K house versus your $200K house?  Nobody believes that anymore.  Consumers are getting wise to it.”

Because of this, the recommendations from Marketing Profs do not appear to be on point:

First, if customers are complaining about your prices, make sure you actually aren’t charging too much. Compare yourself with your competition. Recession or not, if you were already dramatically out-pricing the competition without a dramatic difference in quality or service, perhaps you should consider lowering your prices. (I’m not recommending getting yourself into the low-price game, just make sure your higher prices offer higher value.)

Second, instead of giving away money, strategically provide add-on services or products. Instead of discounting the price of a hair cut at the salon, give away a bottle of that great shampoo you used that made my head tingle and hair smell so great. Instead of cutting the price of your website building services, offer a complimentary, 6-month, search engine optimization (SEO) service.

Well, in real estate, the “competition” has the same issues you do.  So it isn’t at all clear that any one broker is “charging too much”.  Furthermore, since the fundamental problem is in explaining percentage-based pricing to consumers, it isn’t clear that the price is “too high” in and of itself.

Furthermore, in a full-service brokerage, it isn’t immediately clear what “add-on” services a broker can provide in lieu of discounts.  Home inspections?  Lawnmowing services?  What?

At the same time, the consumer perception of the value of services is that all realtors are overpaid for the services they provide.

How to get out of this pickle?

-rsh

Coaching and Managing: On Gen-X

4
I want to sell real estate, coach!
I want to sell real estate, coach!

I love that Wendy Forsythe, VP of Broker Services for Better Homes and Gardens Real Estate, often blogs on Gen-X and Gen-Y issues in real estate. I suspect that Wendy and I are both Gen-Xers, and if you searched our past photographs, I’m sure there will be a few blackmail-worthy examples involving neon clothing, Z-Cavaricci’s, penny loafers, pastel blazers, Aqua-Net, and The Cure t-shirts.

Her latest post, however, makes us Gen-Xers out to be some sort of emotionally fragile prima donnas:

Professional sports teams have managers and coaches. The reason for this is because these are two different jobs. In most real estate offices, the leader has to wear many hats. If you want to attract and retain Gen X and Gen Y agents you have to wear your coaching hat, not your manager’s hat.

With all due respect to the redoubtable Ms. Forsythe, I’d like to extend the sports analogy a bit more and beat it until it completely collapses under its own weight.

Yes, professional sports teams have both managers and coaches.  If you’re going to wear the coaching hat, and do everything positive and shiny, then by golly, make sure someone is wearing the General Manager hat and being a total results-driven hardass.

The coach might be telling some young rookie, “Hey, kid, I believe in your abilities — just get out there, focus on the ball, and swing away.  The hits will come.”  The GM, however, is like, “Hey you — you hit .220 for the past twenty at-bats.  It’s time for you to get sent down to the minors.”

Wendy gives us this as an example of the difference between manager and coach:

  • Manager’s message: “You’ll have to be patient, it takes time to get established in this business. It is not going to happen overnight.”
  • Coach’s message: “You can do it. You are doing all the right things. Keep focused.”

Let me add the General Manager’s message:

  • General Manager’s message: “Get your ass in gear and start producing, or I’m cutting you to make roster spots for someone who will.”

Look, Gen-Xers are in our 30’s.  We’re no business neophytes with stars in our eyes and dreams in our heads.  Most of us remain idealistic, perhaps, but I can say with reasonable confidence that the Gen-Xers who have moved on into the real world are hardnosed, experienced businesspeople who know how to get things done.  Ain’t no use in whining and crying.  When it’s game time, it’s game time.  We know that.  All the excuses in the world won’t turn that routine flyball into a base-clearing double.  We know that too.

I am now in the position of working with the so-called Millenials, who report to me.  You know what?  I’m finding that the good old fashioned motivation works just fine with this so-called “coddled generation” as well.  Sure, have all the freedom and initiative you want — but when it’s game time, it’s produce or else, kiddo.  If that don’t make you happy, well, it’s a big wide world; I’m sure there’s a job out there for ya.

Strangely, they all get it.  They all respond to such clear, unambiguous direction.  I don’t feel like I have to coddle them, or be their therapist.

If anything, I think every employee of whatever generation responds better to clear, unambiguous goals and expectations.  There really is not fudging around, “Hit this number to keep your job; hit that number to get promoted.”  Just like in sports — there’s no getting around that final score that determines who the winner is and who the loser is.  Gen-X’ers, Gen-Y’ers, Millenials, Boomers, Greatest Generation — we all understand it in the end.

The continual Oprahization of our society, including our workplace, is causing confusion amongst the employees.  And I write as an employee and as a manager both.  Trying so hard to “feel your concerns” and “understand your motivations” and such is actually counterproductive.  At the end of the day, business is simple: the money coming in has to be greater than the money going out.  This iron law of business has not changed since the day Thag traded his woolly mammoth tusk to Krang for the pretty cowrie shells, and it will not change until the end of time.

And you, as part of an organization, are either helping to have more money coming in or to have less money going out.  Simple, isn’t it?

So… yes, by all means, be nice to your people.  Be sweet and kind to your employees.  They’ll maybe be motivated better and respond.  But really, if you’re going to do the coaching thing, encouraging and motivating, then make sure they also see the General Manager thing, that expects, demands results.  Or else.

It’ll be good for both of you.

-rsh

Dorm Life vs. Ownership

10

At the risk of revealing the true depths of my ignorance — seeing as how my son is some 15 years away from having to worry about college — I couldn’t help but think about this post on Zillow’s blog:

While the potential gains are tantalizing, there are some major red flags and risks involved with financing your child’s private study environment/animal house. To further tap into this concept, I read up on the Zillow blog about buying a house for college and raised this question on Zillow Discussions yesterday. “Mom & Dad: Should I live in the dorms or will you buy me a house?” Four hours and 45 comments later, I had my answer—-or at least a lot of new opinions.

Do go check out the comments.  Most of them tend to emphasize the idea that 18-year olds are simply not responsible enough to be homeowners.

The author concludes, therefore, that dorm life is the answer:

My advice: Parents, make your kids live in the dorms. Dorm life builds character, strengthens your immune system, and is the heart of undergraduate college experience. Parents, college is your time to relax and enjoy an empty nest. Don’t stress yourself out by micromanaging your child’s college experience.

There are two questions that come to mind.

1.  Is there some magical responsibility transformation that happens between the age of 18 and 22?

Because the exact same analysis — whether to buy a house for your college student child or to have them live in a dorm — applies to whether you should help your new college graduate buy a place or to have them live in an apartment.

My family was not in a financial position where this was ever an issue, but if it were, I’m not sure that I was somehow far more mature at 22 than I was at 18.

In fact, in retrospect, I think in many ways I was more mature as a sophomore in college than I was my first year on Wall Street: I had less money, fewer distractions, and more homework.

Meanwhile, my wife owned her own little studio condo within 18 months of graduating from college, and her parents helped her with the downpayment.  As a 22 year old assistant buyer, making roughly $19K a year, she managed to make mortgage payments every month, determined not to ask Mom and Dad for money for her house.  She told me stories about eating nothing but bologna sandwiches for seven months straight, just so she could make the house payments and repay her folks for their down payment loan.  Knowing her as I do, I’m not convinced that she couldn’t have done the same as an 18 year old.

I suppose every parent knows their own child, and can make the decision whether he/she is mature enough to handle the responsibility of homeownership.  But that leads to…

2.  If your child is not mature enough to handle homeownership by 18, is she truly ready to be leaving your roof in the first place?

This may take the discussion a bit away from what I usually talk about on this blog.  But it is a real question.  College isn’t kindergarten; it isn’t sleepaway camp.  One gets exposed to all sorts of things that require judgment and responsibility to handle — alcohol, sex, drugs, even violence, not to mention the actual course of study, and so on.

It seems odd to me to claim that a student isn’t mature enough to make payments, maintain the property, and so on, but is mature enough to make decisions about sexual partners, choice of career, and whether and how much to drink.

Are we, as a society, holding our young people to too low a standard?

-rsh