Goal of the internet: destroy middlemen
Remember back when the internet was going to destroy the middleman? The New Yorker ran a famous cartoon back in 1997 with seven business people sitting around a conference table, and the caption reads, “On the one hand, eliminating the middleman would result in lower costs, increased sales, and greater consumer satisfaction; on the other hand, we’re the middleman.”
While I doubt the cartoon’s creator had real estate in mind, real estate agents and brokerages have been grappling with how to successfully merge the off-line world of real estate with the on-line world for well over a decade. However, as 2013 begins the internet hasn’t eliminated the middleman in real estate but instead created more!
Zillow and Trulia, for example, are both advertising business that run on the display of real estate information. They are the new middlemen, and they are profiting quite handsomely – primarily by selling ads to real estate agents while providing consumers with information that may or may not be accurate. In fact, one could cynically argue that they have a strong incentive to make the listing agent information difficult for a consumer to discover, because that increases the value of the ads they are running alongside a particular listing.
I’m not here to say that Zillow and Trulia are the enemy or the answer, but to instead ask why most industries have found the internet to be a phenomenal way of reducing middlemen and costs while the internet has created more middlemen in Real Estate. To answer this, I want to compare real estate to two industries – book publishing and travel.
How publishing middlemen were destroyed
Amazon.com, for example, started out to change the publishing industry by making it just as easy to buy a book at home as it was to buy in a store. As the world quickly discovered, amazon.com actually had some advantages by being online. For example, they could stock millions of books, unlike local stores that were limited by their physical space. When amazon.com started, way back in the 1990’s, the kindle had yet to be invented, so it wasn’t even a matter of re-inventing book delivery, this was just about being able to create the world’s biggest inventory of books because they could build warehouses anywhere cheap land was available near a major airport.
But when you buy a book, you always get the same thing: a bunch of words. They may be printed on a page and bound in soft cover or hard cover or they might be digitally displayed on a screen. Regardless, though, you buy a book and you get your words. And you can read those words pretty much anytime and anywhere you want, with very little possibility that things will go wrong. And if things do go wrong? It’s probably not a big deal. Regardless of how much the book cost, it isn’t a financial investment that is a part of your retirement strategy. And no matter how good the book is, you would never invite friends over to just look at your book (you might be a member of a book club, but book clubs get together to discuss the book, not to actually look at each other’s copy of a book).
How travel middlemen were destroyed
The internet has also transformed the travel industry. While we used to go to a travel agent to plan out a complex trip and book tickets, most people do those things online now. And while a plane ticket might be more expensive than a book in the above example, a seat on a plane is, well, a seat on a plane. No one ever sees a really cheap seat and wonders, “Hey, is that seat located inside the pressurized cabin or is it bolted out on the wing?” While there are a variety of seats available within a plane – coach, business or first class – they all essentially do the same thing, and once you have consumed your plane ticket, you move on with your life. Perhaps your plane trip has resulted in the memories of a lifetime, a new client, or a visit to see a long-lost friend. Unlike a home, a plane trip or a book is a consumable item.
How middlemen have thrived in real estate
Real estate is fundamentally different for a variety of reasons, but let’s look at a few. For one thing, brokerages have never possessed a physical inventory of homes for sale. No real estate agent has ever offered to take anyone back to the warehouse to see this year’s available homes, although we have put millions of people in our cars to go visit the homes available in a specific neighborhood. But there is no economy of scale to be gained with a really big warehouse of homes, because homes don’t exist in warehouses, they exist in neighborhoods. Furthermore, while two homes may be very similar, no two homes are identical. Real estate, by its very nature, cannot be commodified.
Websites now offer consumers a wealth of information (some accurate, some less-so) about homes online, yet I’m willing to venture that there is nothing – ever – that will replace physically visiting a home you are interested in purchasing. Why? Because no matter how much information you put online, sometimes the most important things about a home are the things that you can’t see in the marketing text or the pictures. For example, is the master bedroom window under a streetlight that shines excessively bright at night? Is the home at the top of a steep hill that would not be easily accessible by a disabled individual? Does the breeze from a landfill usually blow odors towards the house? Is the next door neighbor a lunatic who throws parties until 4am on a regular basis? In other words, what makes a home desirable is not just the presence of some features, but also the absence of certain other features. Making valuation even more complex, home buyers often don’t always agree about the value of particular features.
Homes differ from both other consumer goods and financial instruments because they have an innately physical and fixed presence, and they exist in a context of other homes and people. Regardless of what book you place on either side of War and Peace, the book in the middle will always be War and Peace. But a home with two great neighbors is more valuable than a home with two horrible neighbors. Homes are also not a disposable consumer good. No one ever says, I’m finished with that home lets put it on the shelf and go buy the sequel. And while people might like to brag or worry about how their investment portfolio is doing, no one ever invites you to come over and enjoy the physical presence of their stocks or bonds.
If I had to sum it all up, I’d say the most distinguishing feature of real estate is permanence. Not only are the permanently and innately tied to their environment, people purchase homes for the long-term. Real estate is neither consumable nor disposable, which may explain why rental sites like AirBnB do well – if you get a bum vacation rental, you aren’t stuck there for the next three – five years of your life.
Regardless of the unique traits of real estate, consumers clearly want accurate information about homes online. In 2013, I think the real estate industry owes it to our clients to find a way to deliver that information with fewer middlemen.
Serial procrastinator? Check your mental energy, not time management
(EDITORIAL) Need a hack for your time management? Try focusing on your mental energy management.
Your author has a confession to make; as a “type B” personality who has always struggled with procrastination, I am endlessly fascinated by the topic of productivity and “hacking your time.”
I’ve tried most of the tricks you’ve read about, with varying degrees of success.
Recently, publishers like BBC have begun to approach productivity from a different perspective; rather than packing days full of to-do items as a way to maximize time, the key is to maximize your mental energy through a different brand of time management.
So, why doesn’t time management work?
For starters, not all work time is quality time by nature. According to a study published at ScienceDirect, your average worker is interrupted 87 times a day on the job. For an 8-hour day, that’s almost 11 times per hour. No wonder it’s so hard to stay focused!
Second, time management implies a need to fill time in order to maximize it.
It’s the difference between “being busy” and “being productive.”
It also doesn’t impress your boss; a Boston University study concluded that “managers could not tell the difference between employees who actually worked 80 hours a week and those who just pretended to.” By contrast, managing your energy lets you maximize your time based on how it fits with your mental state.
Now, how do you manage your energy?
First, understand and protect the time that should actually go into deep, focused work. Studies continually show that just a few hours of focused worked yield the greatest results; try to put in longer hours behind that, and you’ll see diminishing returns. There’s a couple ways you can accomplish this.
You can block off time in your day dedicated to focused work, and guard the time as if it were a meeting. You could also physically retreat to a private space in order to work on a task.
Building in flexibility is another key to managing your energy. The BBC article references a 1980s study that divided students into two groups; one group planned out monthly goals, while the other group planned out daily goals and activities. The study found the monthly planners accomplished more of their goals, because the students focusing on detailed daily plans often found them foiled by the unexpected.
Moral of the story?
Don’t lock in your schedule too tightly; leave space for the unexpected.
Finally, you should consider making time for rest, a fact reiterated often by the BBC article. You’ve probably heard the advice before that taking 17 minute breaks for every 52 minutes worked is important, and studies continue to show that it is. However, rest also includes taking the time to turn your brain off of work mode entirely.
The BBC article quotes associated professor of psychiatry Srini Pillay as saying that, “[people] need to use both the focus ad unfocus circuits in the brain,” in order to be fully productive. High achievers like Serena Williams, Warren Buffet and Bill Gates build this into their mentality and their practice.
Embracing rest and unfocused thinking may be key to “embracing the slumps,” as the BBC article puts it.
In conclusion, by leaving some flexibility in your schedule and listening to your body and mind, you can better tailor your day to your mental state and match your brainpower to the appropriate task. As someone who is tempted to keep a busy to-do list myself, I am excited to reevaluate and improve my own approach. Maybe you should revisit your own systems as well.
6 skills humans have that AI doesn’t… yet
(OPINION / EDITORIAL) It’s not unreasonable to be concerned about the growing power and skill of AI, but here are a few skills where we have the upper hand.
AI is taking over the workforce as we know it. Burgers are already being flipped by robotic arms (and being flipped better), and it’s only a matter of time before commercial trucks and cars will be driven by robots (and, probably, be driven better).
It may feel unnerving to think about the shrinking number of job possibilities for future humans – what jobs will be around for humans when AI can do almost everything better than we can?
To our relief (exhale!), there are a few select skills that humans will (hopefully) always be better at than AI. The strengths that we have over AI fall into 3 general categories: Ability to convey emotion, management over others, and creativity.
Let’s break it down: Here are 6 skills that we as humans should be focusing on right now.
Our ability to undertake non-verbal communication
What does this mean for humans? We need to develop our ability to understand and communicate body language, knowing looks, and other non-verbal cues. Additionally, we need to refine our ability to make others feel warm and heard – if you work in the hospitality industry, mastering these abilities will give you an edge over the AI technologies that might replace you.
Our ability to show deep empathy to customers
Unlike AI, we share experiences with other humans and can therefore show empathy to customers. Never underestimate how powerful your deep understanding of being human will be when you’re pitted against a robot for a job. It might just be the thing that gives you a cutting edge.
Our ability to undertake growth management
As of this moment, humans are superior to AI when it comes to managing others. We are able to support organization members in developing their skillsets and, due to our coaching ability, we are able to help others to grow professionally. Take that, AI!
Our ability to employ mind management
What this essentially means is that we can support others. Humans have counseling skills, which means we are able to help someone in distress, whether that stems from interpersonal relationships or professional problems. Can you imagine an AI therapist?
Our ability to perform collective intelligence management
Human creativity, especially as it relates to putting individual ideas together to form an innovative new one, gives us a leg up when competing against AI. Humans are able to foster group thought, to manage and channel it, to create something bigger and better than what existed before. Like, when we created AI in the first place.
Our ability to realize new ideas in an organization
Think: Elevator pitch. Humans are masters of marketing new ideas and are completely in-tune with how to propose new concepts to an organization because, you guessed it, we too are human. If the manager remains human in the future (fingers crossed!), then we know what to say to them to best sell our point of view.
Using what we know, it’s essential for almost all of us to retrain for an AI-driven economy that is most likely just a few years away. My advice for my fellow humans? Develop the parts of you that make you human. Practice eye contact and listening. Think about big pictures and the best way to manage others. Sharpen your mind with practicing creative processes. And do stay up to date with current trends in AI tech. Sooner or later, these babies are bound to be your co-workers.
Your business model doesn’t have to be a unicorn or a camel to succeed
(OPINION / EDITORIAL) It’s not unusual for people to suggest a new business model analogy, but this latest “camel” suggestion isn’t new or helpful.
This year in 2020 I’ve seen a great deal of unique takes on how our system works. From 45 all the way down to children instructing adults on how to wear masks properly. However, after reading this new article published by the Harvard Business Review, I don’t think I’ve ever seen something so out of touch with the rest of the business world. Here’s a brief synopsis on this article on business model.
The author has decided that now of all times it’s drastically important for startups and entrepreneurs to switch their business tactics. Changing from a heavy front-end investment or “startups worth over a billion dollars” colloquially called “Unicorns” to a more financially reserved business model. One he has tried to coin as the “Camel”, using references to the animal’s ability to survive “long periods of time without sustenance, withstand the scorching desert heat, and adapt to extreme variations in climate.”
The author then goes on to outline best practices for this new business plan: “Balance instead of burn”, “Camels are built for the long haul”, “Breadth and depth for resilience”.
Now I will admit that he’s not wrong on his take. It’s a well thought-out adjustment to a very short-term solution. You want to know why I’m sure of that? Because people figured this out decades ago.
The only place that a “Unicorn” system worked was in something like the Silicon Valley software companies. Where people can start with their billions of dollars and expect “blitzscaling” (a rapid building-up tactic) to actually succeed. The rest of the world knows that a slow and resilient pace is better suited for long term investments and growth. This ‘new’ business realization is almost as outdated as the 2000 Olympics.
The other reason I’m not thrilled with this analogy is that they’ve chosen an animal that doesn’t really work well. Camels are temperamental creatures that actually need a great deal of sustenance to survive those conditions they’ve mentioned. It’s water that they don’t need for long periods, once they stock up. They have to have many other resources up front to survive those harsh conditions the article writer mentioned. So by this analogy, it’s not that different than Silicon Valley’s strongly backed “startups.”
If he wanted to actually use the correct animal for this analogy, then he should call it a tortoise business plan. Actually, any type of reptile or shark would work. It would probably be a better comparison in temperament as well, if we’re talking ‘slow and steady wins the race.’ Whatever you do, consider your angle, and settle in for the long haul.
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