Big versus small – which will win?
An army of 1,408 versus an army of two. If you were a betting person, which would you bet on? Most folks would obviously choose the larger army, but when it comes to real estate technology, more hasn’t been better. The success of two big websites – Trulia and Zillow – do a great job in illustrating the challenges created by 1,408 local independent Realtor associations, particularly in the area of technology.
When I started in real estate in 2002, group voice mail distribution passed for cutting edge. My previous career was in the technology industry, and stepping into the real estate industry felt like stepping into the technological dark ages. While things have certainly improved, the real estate industry still lags painfully behind, and we have no one to blame but ourselves and our 1,408 local associations.
For example, many of those 1,408 associations run their own multiple listing service, and while there aren’t 1,408 MLS software vendors, there are more than enough to go around. In addition to the wide variety of software powering each MLS, most associations have their own set of rules, terminology, and local customs.
If you are a really smart entrepreneur with a killer idea for a software product aimed at real estate agents, offering a nationwide product that tightly and meaningfully integrates with a MLS means you’ll be dealing with 1,408 unique associations. Each of these associations will have rules, technology, approval processes and customs that are just different enough to make developing a nationwide product almost cost and time prohibitive.
Not so fast… don’t blame the agents
A good analogy is the localization of software into various languages across the globe. Can you name one software company that translates their software into 1,408 languages? It’s easy to blame agents for the slow adoption of technology in real estate. It’s harder to merge 1,408 associations.
But if the real estate industry is serious about enabling smart women and men with a killer software idea to succeed in our industry, then let’s stop scapegoating agents and get serious about merging those 1,408 local associations into a number that is more approachable and palatable for technology developers.
Two isn’t necessarily the magic number, but I think the success of platforms like Zillow and Trulia do a great job of demonstrating that more isn’t always better. What do you think?