Notorious R.O.B.

There is an interesting little dichotomy in the results of the survey that Inman ran recently, and published as a Special Report: “To Be A Broker: Charting a Course for Recovery“.  It’ll cost ya some money, unless you’re an Inman Premium subscriber, but I think Inman did a great job here in putting the information together.  If you care about the industry, brokerage models, and the like, you’re going to want to check out this report.  So go buy one, or subscribe.  (Disclosure: I am a columnist for Inman.com… so uh, if you subscribe and such, I think I benefit through that.  Plus, you can see my archives on Inman.com, which might be entertaining later.)

My first thought upon reading the Report was that the sample might be skewed — after all, presumably Inman contacted brokers in its database of subscriber or some such.  They have to be among the tech elites, these brokers, to be subscribers of Inman.  Then my second thought was, that real estate brokers, more than perhaps any other group of business owners in America, need a remedial class on business strategy.  My third thought was, hey, this might be a good blogpost!

Said blogpost follows.

Read the rest of this entry »

In part 1, I tried my level best to keep my opinions restricted to what RPR actually is, based on the demo.  And what RPR is is a fantastic piece of web engineering.  In this part, I get more into the opinionating and what Reggie Nicolay might term, “fearmongering”.

Let us examine the possible impact of RPR on brokers and agents, based on what we know thus far.

Caveat Lector: What We Know That We Don’t Know

One thing I learned at REBarCamp NYC that just happened last week, from Reggie himself, was that the Terms of Use for RPR have not yet been set.  And while the RPR has announced API’s, the terms of use on those have not been set or published.  We also don’t know what those API’s will actually do in terms of data provisioning over the API’s to third party tools or websites.

Therefore, one of the biggest pieces to the puzzle — the legal rights and responsibilities of RPR’s users — is as yet unknown, except in glimpses.  We also don’t know how flexible the RPR system will ultimately be.  It may be incredibly flexible, or it may be a closed system.

We don’t know yet whether brokerages (or even agents) can participate directly in RPR, or if they have to wait for their MLS to first sign up with RPR in order to utilize the full range of functionality.

For that matter, since all we’ve really seen is a video demo and some screenshots, we don’t really know at the end of the day what the finished product will actually look like and how it will work.

Enough caveats?  Okay, let’s get into this…

Read the rest of this entry »

First of all, let me give a shout-out to Hey Amaretto, aka, Diane Guercio, whose blog I just read for the first time.  She’s got an amazing voice for the web: personable, yet relevant, with useful information mixed in with humor and an overall fun voice.  Really, check her out for one example of how realtor blogging should sound.  (She is also now blogrolled here.)  Here’s a taste:

So, okay, I can’t see how they would have signed an Exclusive Buyer’s Agency contract, let alone a MA Mandatory Agency Disclosure form. And handing out my lockbox codes to buyers doesn’t exactly constitute representation. Just thinking about the things that could happen made me really upset. Suppose the buyers had slipped on the ice, or had fallen down the cellar stairs, or SAID they had fallen down the cellar stairs? I am just getting over the headache that had started after I was handed this little nugget of information.

See what I mean?  Useful info, but with a really nice, personable, human-sounding voice.

Her latest post — which I found out via Twitter (which is, in and of itself, some sort of testament to social media) — is also interesting: Business Darwinism, Success, and Laundry.  Her point appears to be that to survive in a Darwinist environment, one needs to become a “Shortcut” — a superior specimen par excellence that becomes the ‘automatic choice’ for any given task.  And to become a “Shortcut”, one needs plenty of elbow grease:

And that is the point, in summary- by working harder and better than others, you become indispensable. Not much of a surprise that I scored well on the online test, given the rigorous training sessions I had been through with the little cherubs. I guess you want to be the best you can be, in business, in your personal relationships, in life. That’s how you create job security, and really, it’s the only way to go, regardless of the rewards. (Emphasis added.)

Now, here’s the thing: I have a passing interest in the application of Darwinist theories to other subject areas.  Indeed, it’s fascinating what happens when you apply evolution to something like computer programming.  There’s a whole institute, called the Santa Fe Institute, that focuses on things like chaos theory and evolution as applied to areas like economics, physics, chemistry, and so forth.

[By no means do I know more than the tiniest of the tiny bit about any of this stuff.  So it is quite likely that I'm going to sound like an idjit in the next few paragraphs, since a little knowledge is a dangerous thing.  Caveat lector. -- ED: And this would be different from your other posts how?]

Evolution and Effort

But at the heart of evolutionary theory is the notion of competition.  Evolution is not, as popular usage of the phrase has come to mean, a peaceful, gradual change from one state to another.  It is a violent conflict, with winners and losers, and the losers in evolutionary struggle almost always die.

The interesting thing to note, from a theory standpoint, is that the winners and losers are not differentiated by a level of effort.  In other words, there is no suggestion (and no evidence) that species which go extinct did not work at survival.  The dodo bird quite likely worked hard at finding food, reproducing, and so on given its environment.  It just couldn’t adapt fast enough, or adjust quickly enough, when its environment changed dramatically with the arrival of humans — and more importantly, their livestock:

However, when humans first arrived on Mauritius, they also brought with them other animals that had not existed on the island before, including dogs, pigs, cats, rats, and Crab-eating Macaques, which plundered the dodo nests, while humans destroyed the forests where the birds made their homes;^[20] currently, the impact these animals – especially the pigs and macaques – had on the dodo population is considered to have been more severe than that of hunting.

Applied to business, then, the lesson frankly is not to work harder but to adapt to changing conditions faster.

If you’re a buggy whip manufacturer, no amount of hard work, no amount of superhuman effort, no amount of being the go-to guy when it comes to horse buggy whips is going to save you from extinction when automobiles replace the horse-drawn carriage.  That is an environmental change, driven by technology: your only choices are to adapt or perish.

Which makes Diane’s observations correct, but only in part.  Working harder and better than others to become indispensable is the key to survival, but only if the hard work and better work is suited to the environment in which they are happening.

Being a mom, frankly, is the wrong analogy here, because no matter how lazy you are, no matter how neglectful you are of your kids, you are still indispensable to them.  Conversely, Diane might be the best mom in the entire world; she could be the “Shortcut”, the go-to mom, for all things momlike.  That does no good for my kids who don’t have Diane as her mom; they’ll have to settle for their own mom (who, incidentally, is pretty kickass too).

Evolution in Real Estate

Which brings us back to real estate, evolution, competition, and Darwinism.  The situation we face today is not simply a “market downturn” — although there is no doubt that the market downturn is part of the environment.  The situation, frankly, is that the environment itself has changed irrevocably, as disruptive technology tends to make happen.

I just don’t see how it pays to work your tail off doing the outdated things that worked prior to the Internet era.  You might become the go-to gal when it comes to making property flyers, but when 80% of consumers are finding homes online, does that hard work matter much?

I know this is obvious to most of the folks who are reading this (after all, this is a blog….)  But the challenge the industry faces as a whole is one of evolutionary adaptation.  Given fundamental changes in the environment, does it make sense to keep doing what one has been doing? At the same time, change for change’s sake isn’t necessarily going to lead to success either.  Just because ‘social media’ is the in-thing today doesn’t mean that it makes sense for you or your company to do.  On the other hand, maybe it does.

All depends on your assessment of the environment, and what efforts will lead to success in your environment.  Once you have some idea, then and only then will all that hard work and better work pay off.

A Modest Suggestion

So allow me to make one modest suggestion for the various real estate companies.  I know the trendy thing to do right now is to hire various positions like “Director of Social Media” and “Chief Blogger” and such.  Those things, in and of themselves, are just fine.

But you really need to have a “Chief Evolutionary Officer” whose job is to continually look at the environment and assess whether the strategies you have in place are the right ones right now.  (And yes, that should be the CEO in most cases.  The acronym is fully intentional.)  We are undergoing significant environmental disruption; now is the time to pay very close attention to the environment to ensure that all that hard work is actually accomplishing something.

-rsh

So let’s say that some brave soul out there has decided to gamble away his life at the urgings of a certain blogger who works for a certain data company in New York City. To him, I offer my deepest sympathies.

But courage! If this works, please do remember to look down upon us peons as you fly overhead in your Gulfstream G650. (Damn, even the website for that plane looks like it cost more than I make in a year.)

This brave soul would have gone forth, found rainmaking partners, installed an institutional CRM system, and is ready for business!

Well, not quite… there are still more steps, more things to consider.

One of the things this brave soul and his partners must do is to think about redefining the profession of “realtor”. [ED: Oh, is that it? I was worried they might have to do something hard.... /rolleyes]

Keep in mind that by going the institutional route, the Firm has taken on a very different cost structure than traditional brokerage. Instead of commissioned 1099 independent contractors, the Firm has 1040 salaried employees with benefits (which are costly). It has to take on the cost of CRM, of support staff, and of support professionals in IT and marketing that a traditional brokerage simply does not have. As older and wiser heads have pointed out, the Firm forgoes the very sweet IRS rules treating real estate agents as Statutory Nonemployees.

The 1099-based approach rewards brokerages that unleash a horde of low-training, low-skill agents to go forth and blanket the marketplace. They will make up in volume what they lack in quality, because even the worst agent will probably get her sister to list with her, at least once. Since the 1099 doesn’t actually get paid until some sort of transaction has closed, the brokerage could have nearly an unlimited number of such agents running around. For that matter, it almost appears as if some traditional brokerages have become de-facto landlords to their agents based on some of the desk cost oriented business model.

The 1040-based approach simply cannot compete with this low-cost, low-skill, high-turnover model on the same basis. At the same time, it should be pointed out that the 1099′s simply cannot compete with the high-cost, high-skill, low-turnover model of the 1040-based Firm on its home turf.

Therefore, for the Firm, it becomes necessary to shift the grounds of competition. If your thoroughbred can outrun any other horse running in a straight line, you don’t take him to a steeplechase competition. You take him to the Kentucky Derby. Read the rest of this entry »

So I’m trying to put my thoughts on cluetrain real estate together.  And while all those thoughts are swimming around my head, I read this fantastic interview of Alex Chang, CEO of Roost.com, over at 4Realz.

Specifically, I read this section:

I don’t think it is a stretch to say that the big brokerages are only just beginning to use their websites to create a compelling consumer experience that competes with REALTOR.com. Why do you think it has taken the national brokerages so long to complete on this front?

It’s a question of core competency. It took a long time for retailers to get good at building e-commerce sites which is one reason why Amazon has done so well. Clearly, forward thinking brokers get this and are investing in their own websites. But the bottom line is that building great customer experience online is hard, even if that’s all you focus on all day long. And it’s not cheap. Also, I think it takes a little while to start to be able to measure and see a return from a broker’s site in this industry. So you have to have the appetite to make longer term investments in technology. That can be a tough pill to swallow.

Then I read this:

To date, many of the most successful real estate professionals do most of their marketing off-line. If one of these experienced real estate agents wanted to jump-start their online marketing, where would you recommend they begin?

It starts with your own Web presence. First, create a couple great websites and blogs that get across why you are the best at what you do in some specific ways. Ensure that there are all sorts of ways for consumers to contact you on these sites, and obviously make sure you have some excellent ways for consumers to search for homes on these sites (you knew we were going to say that). Second, get some tools that will help you actually see what return you’re getting from traffic to these sites. Where is the traffic coming from? What leads is it generating? When those are done, find targeted marketing vehicles that send traffic you can actually measure to these sites at budget levels you can afford.

Did you get that?

So on the one hand, the large brokerages like RE/Max and Coldwell Banker lack the core competency to build great customer experiences online.  On the other hand, Alex is recommending that agents create “a couple of great websites”.  Not just one, mind you, but a couple.

Alex’s parenthetical comment above, the “you knew we were going to say that” is actually illuminating.  Here’s my translation of what he is actually saying:

You need a couple of great websites if you’re going to be successful marketing yourself online.  Thing is, building good websites is very hard work, even if that’s all you do every hour of every day.  It’s also very expensive.  In fact, great big companies like Realogy and Re/Max can’t do this right.  Ergo, there’s no way that you, Ms. Agent, are going to be able to.  Thankfully, Roost.com provides you with an excellent search solution and a great IDX-compliant website to you.  You only pay for the traffic you want.

I dig it.  It’s smart marketing on Alex’s part.

There’s a saying in the retail industry, of which my wife is part, that you don’t out-WalMart WalMart.  How do you compete with the behemoth that is WalMart?

If you try to compete on the same basis — price — then WalMart will kill you.  Their operational efficiency is many times greater than yours.  Having invested billions of dollars into their IT system, WalMart knows when a lightbulb in Aisle 4 of their store in Topeka is about to go out.  They know that Store #1422 will run out of Purina CatChow day after tomorrow, so they send the truck out with Purina CatChow with just the right number of units today, to ensure that Store #1422 never runs out, and the customer is never turned away with cash in her pockets.

You’ve got to compete on some different basis.  Target is doing it through designer labels, appealing to higher end customers.  Costco is doing it with more branded merchandise.  Neither competes with WalMart on price alone.  You can’t out-WalMart WalMart.

So here’s a thought for all you real estate agents out there.

Go over to Roost.com, to Trulia, to Zillow, to whatever site you can think of.  Check out what they have.

Can you out-Roost Roost?  Out-Trulia Trulia?  Out-Zillow Zillow?

Those websites have great user interfaces, wonderful data, and trained professionals who spend all day thinking about user experience, information architecture, and human-centered design.  You have none of that.

At the same time… I have a secret to tell you.  Guess what Roost, Trulia, and Zillow don’t have?  That none of the great and powerful websites out there have?

A face.

Not one of these websites has a face.  Or eyes.  Or a smile.

You can’t out-Roost Roost.  But Roost can’t out-you You. 

Cluetrain claims that markets are conversations.  But it doesn’t say, nor do I think it needs to say, that markets are online conversations.  The Internet makes types of conversations possible that were not before.  But there are conversations that predate the Web, and will survive it.  Authentic, human, face-to-face engagement.

There is no substitute for it in business.

And you’ve got a face.  Roost, et. al., does not.

Think about that.

-rsh

I hate Web 2.0.

I mean I hate the term. People throw it around all the time, and it even comes up in conversation at parties:

“So, what’s your cute friend Sarah doing?”

“Oh she’s doing publicity for this fabulous Web 2.0 company in the dress-swapping community.”

“That’s so cool — can you give me her phone number?”

Etc.

It turns out Web 2.0 is like “freedom of speech” — something that a lot of people think they understand, but do not. I think I understand it better than most, but when you have such honest disagreement about what the term means, it’s difficult to come to consensus.

Now, even as I hate the term, I like most of the websites designated as “Web 2.0″ despite there being no consensus on what that actually means. Digg is a cool little site; I use Pandora.com pretty often to find new music; Wikipedia is indispensable; and many blogs are very educational and some are top-notch entertainment. The reason is that Web 2.0 (in my not so humble opinion) is really a set of principles, like Agile is in software development, that guide business practices. Those business practices in turn drive features and rules for websites for those particular businesses. And I like those business practices, principles, and what they imply for our world.

I happen to believe that the roots of “Web 2.0″ lay in the Cluetrain Manifesto, first published in 1999 — at the height of the first dotcom bubble. If you’re in marketing, and you don’t know what cluetrain is, you seriously owe it to yourself and to your employer and to your customers to go read at least the 95 theses and the first chapter.

In the first chapter, while discussing how the Web as we knew it (in 1999) came to be, the authors of Cluetrain Manifesto explained it as succintly as anyone ever has:

Well, OK, a few things did happen in between. One of those things was that the Internet attracted millions. Many millions. The interesting question to ask is why. In the early 1990s, there was nothing like the Internet we take for granted today. Back then, the Net was primitive, daunting, uninviting. So what did we come for? And the answer is: each other.

The Internet became a place where people could talk to other people without constraint. Without filters or censorship or official sanction — and perhaps most significantly, without advertising. Another, noncommercial culture began forming across this out-of-the-way collection of computer networks. Long before graphical user interfaces made the scene, the scene was populated by plain old boring ASCII: green phosphor text scrolling up screens at the glacial pace afforded by early modems. So where was the attraction in that?

The attraction was in speech, however mediated. In people talking, however slowly. And mostly, the attraction lay in the kinds of things they were saying. Never in history had so many had the chance to know what so many others were thinking on such a wide range of subjects. Slowly at first, a new kind of conversation was beginning to emerge, but it would achieve global reach with astonishing speed.

So if you read the 95 theses, then you know that cluetrain believes markets are conversations. From the above you read that the basis of the Internet, from back in the green phosphor UNIX days of yore, is the ability for people to talk to each other.

Look at most of the top so-called Web 2.0 companies today. What they do, essentially, is provide a space for conversation — then they more or less get out of the way. Facebook is actually empty, if you think about it — Facebook itself produces nothing but the infrastructure. They’re like the hotelier who builds a hotel and waits for conventions and tradeshows to come make it interesting. It’s the members who produce all of the things that make Facebook interesting. Same thing with Wikipedia, Digg, Techmeme, Flickr, del.icio.us, and even supposedly “Old Web” companies like Ebay and Amazon (in its reviews).

So, with the above agreed on (for the sake of discussion if nothing else), where does the Blog fit into this?

I think it’s fairly obvious that the Blog is just a voice in the conversation. That’s it. Nothing more, nothing less. Thing is, what we do isn’t “web 2.0″ — it isn’t even particularly innovative in any way. Since Gutenberg’s time, people have been “blogging” — except they were using dead trees and ink to do it. Newspapers and magazines have been putting forth a voice in the conversation for hundreds of years. They still do, no matter the rise of the digiterati.

Some bloggers, when they get big enough and attract enough of an audience, make a lot of money from advertising. Some folks have called such blogs “web magazines” clarifying that in fact what we do is really no different than some poor schmuck at Pinch’s operation in Times Square does day in and day out.

Well, that is… what we do is no different from a technique standpoint (stringing words together). It is, however, dramatically different if we adopt the cluetrain mindset.

This is just an enormously long winded way of talking about competition in the real estate blogosphere. The Real Estate Tomato recently published a post called “7 Reasons Why Your Local Real Estate Blogging Peers Are Not Your Competition“. It’s interesting and worth checking out in full.

I just noticed one section that really got me thinking about competition in the blogosphere, and by extension, in the Web 2.0 world. The Tomato wrote:

2. Build Win-Win Relationships

Show an interest in your neighbors real estate blog, and they and their audience will show an interest in yours.

This is such a foreign concept for many agents that have been fighting for client loyalty for so many years. But the truth of the matter is that it is precisely this reciprocating effort that will be the difference between a good blogger and a great blogger.

Initiating conversations in emails and in the comments of your peers’ blogs will both establish the recognition of your name and your blog as well as help you earn their trust and their visit.

Bringing local Realtors and their audience to your site to contribute to the discussions on your platform is the reward. But, you’ll need to make the first (or many) effort(s) by playing nice on theirs.

This is certainly another instance of:
Keep your friends close, and your enemies competition even closer.

Now… keep in mind that I’m operating in very much of a cluetrain mindset when I do blogging at all. I’ve got enough positioning and marketing and such to do in my day job that I will not do it on my personal space. I don’t use Notorious R.O.B. to market something, or promote my services, or whatever. So there’s probably a pretty big disconnect between me and those agents who are blogging to generate leads or promote themselves to the local market. Lots and lots of caveats today.

Having said that, doesn’t the above advice strike you as being a little bit… like unto a sleazebag?

I mean, imagine if you went to a party and struck up a conversation with some attractive young woman/man. You’re having a great time talking about Rob Reiner movies or whatever. Then you find out that the only reason why s/he was talking to you was to get a job in your company or sell you something.

Ewwww.

Maybe that’s why I tend to dislike trade shows and industry networking events. They feel like those huge tanks they have in aquariums where sharks circle endlessly, while the chum dart hither and thither to avoid catching their notice.

Why would it be any different simply because you’re doing it online instead of in person?

I comment on other people’s blog; I often use my own blog to comment on stuff I read elsewhere. I don’t do it to earn their trust and their visit. I appreciate it when people do notice, when people do visit, but that isn’t why I wrote the damn post. I have a blogroll, like everyone else, and I add sites I like to it. But I have never asked for a reciprocal link back. Because it isn’t about that. If someone finds my blog worthy of linking to, then he’ll link to it. If he doesn’t, then he won’t. Either way, if I think his blog is saying interesting things, then I’ll link to it. Because what he says is interesting, period.  If it’s not interesting, then I won’t link to it no matter how many emails he sends me, or comments he puts on my site.

Markets are conversations.  The Internet is the last remaining frontier of authentic communication (and confrontation as well) where people aren’t censored, aren’t told what you can and can’t say by some PC thought police.  If you’re anonymous, no one cares what you look like, or where you went to school, or how much money you’ve got: you are judged purely on the substance and style of what you contribute to the conversation.

What Tomato is suggesting is tantamount to turning conversations into markets.  I know that may be what salespeople do, and real estate agents do amongst their friends and family, but honestly, guys, that’s a little bit of a turnoff.

So I have a different suggestion than Tomato’s:

Build actual relationships, not Win-Win relationships.

Stop giving a shit about “who’s winning” and “who’s losing” (in the real world, that is, not in the rhetorics of cyberspace) and give a crap about how the conversation is going.  Just write, just blog, just comment, just email, without expecting a thing in return, and trust that as the conversation spreads, as your contribution is noted, people will notice.  And somewhere down the line, that may result in a fee or two for you.  But please do not go into it like some networking fiend working a party at Inman or something, wanting to schmooze this guy or kiss ass to that blogger or whatever.

Reciprocation is not the hallmark of a great blogger (vs. a good blogger).  Writing is.  If you can write with wit, style, and knowledge about any particular topic, then guess what?  You’re a great blogger on that topic.

Reciprocation is just the hallmark of a nice guy, and while that can be helpful, how many blogs have you seen that is basically just a link farm with totally asinine press-releases-as-articles?  Likely, such a “blog” was astroturfed by some big company’s interactive marketing agency just to raise organic SEO profiles or some crap.

So… let me conclude this… rant?  advice?  thoughts? with this:

Get on the cluetrain.  Recognize that Web 2.0 means authentic conversations.  Then ask, what is the meaning of “competition” in that world of real, genuine, authentic engagement?

-rsh