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.
Our five faves for Friday – almost Thanksgiving edition
(EDITORIAL) This week, I have so many faves that I can barely keep it at just five – Unicorns, gophers, tears, science nerdery, and rebellions, oh my!
I heard a rumor that it’s Friday again, so today we share with you five of the neato-est things that we came across this week – some silly, some serious, all awesome.
1. Brands refusing to open on Thanksgiving Day
It started with retailers opening early on Black Friday, then opening at midnight on Thanksgiving Day, and now retailers are expected to force their staff to work instead of enjoy a bajillion-ish year old American tradition.
But some companies are pushing back, publicly refusing to open on Thanksgiving Day, so even though our home doesn’t care about Black Friday, we’ll be giving some business to those taking a stand.
2. I need you to know about my favorite tv show ever
So there’s nothing new about this, but since you’ve never heard from ME on a Friday Faves roundup, I really need you to know something about me – I have a lot of natural curiosities and history (when not told in a dusty way) fascinates the hell out of me.
Unearthed on the Science Channel is friggen amazing and literally EVERY episode has taught me something that I didn’t know before (like the one about Stonehenge included new discoveries that change how we think about how humans used to operate – seriously mindblowing stuff). All of the episodes are available online, yo, so get to nerding!
3. No one has bought me a Pony Cycle yet
One of the only email newsletters I actually open is The Grommet – they feature independent makers’ inventions and wares, and I’m all about supporting the little guy.
But I posted this insanely amazing Pony Cycle on my Facebook timeline this week with a request that someone buy me one. Guess what? No takers. My friends are monsters. I mean it comes in horse, unicorn (dibs), and zebra, why not buy me one or three?
4. Video that made me cry
After the recent earthquake hit Iran, there has been a deep need for food for the victims. Watch this video (my fave part is the pat pat on the back) and try to tell me that hate isn’t something we’re taught… also, I’m not crying, you are…
5. My favorite gif of this week
If you know me, you know I love gifs more than the average person. So when I came across this one, I knew I had to award it my fave of the week…
Is your job inadvertently harming your health?
(EDITORIAL) We often get so consumed with our work that we unknowingly hurt ourselves in the process. Learn how to keep this from happening.
With the changes in seasons, we tend to put more of an emphasis on our health. This makes sense as flus and colds have a tendency to run rampant around the holidays.
However, we should be more mindful of keeping track of our health throughout the year. And, given that our jobs are such a large part of our lives, it is important to keep in mind that our jobs can have an affect on our health. Which can often be a bad thing.
For most of us, we are in the same space for eight hours of our day. Sometimes we think that just because it’s ourselves occupying that space, things can’t really get germy. Well, think again.
We have so many things that we touch on a daily basis – our keyboard, mouse, phone, ID badge, etc. These have a tendency to become a house for germs, which can hurt us as time goes on.
Combat this by setting aside some time each week to disinfect all of your most-used items. Also, consider keeping some hand sanitizer at your desk.
Getting up to clean around your office can help take care of another issue – being too sedentary throughout the day. Sometimes we get so consumed with plugging away at our computers that we forget to get up and stretch.
This can be harmful to your weight and your circulation. Keep the blood flowing by getting up and moving a bit every hour or so.
The mindfulness of your health should not stop at the physical, but should also involve keeping an eye on mental health. Your job plays a big part in this as well.
First of all, you start and end your day with a commute. For some, this can be incredibly strenuous – expensive, traffic-filled, etc.
This has been known to lead to depression. Try filling this time with positivity and fulfillment by listening to a quality podcast or an audio book. This will help to give meaning to otherwise wasted time.
The most important thing to monitor with your mental health is making sure to not overwork yourself. It can be difficult to find that perfect work/life balance, but it’s necessary for a happy and healthy life.
Try staying away from work emails and texts after a certain time of the day on weekdays or on the weekends. Think about it this way – you’re not supposed to tend to your personal business during work hours, so why let work interfere with your personal time?
All of this can be helped by checking in with yourself every once in a while, or even by using the buddy system and discussing the topic with a work friend.
Lastly, be sure to check with your company to learn about health and wellness programs that may be offered.
Do literally anything with your money besides buy an iPhone X
(EDITORIAL) The iPhone X is pretty snazzy, but let me express why your money belongs literally anywhere besides in Apple’s pocket for this phone.
The iPhone X is off to a rocky start, beginning with the fact that no one seems to know whether it’s supposed to be pronounced “iPhone Ten” or “iPhone Ex” and working up from there.
If you’re here, you probably don’t need me to tell you that a 5.8-inch OLED screen, facial recognition, 4K recording at 60 FPS, and an all-glass design are superfluous as hell — but just in the off-chance that I’m wrong, THE IPHONE X IS SUPERFLUOUS AS HELL.
Take literally 30 seconds to think about all of the mega-cool features that convinced you to buy your last smartphone, then think of the last time you used even half of those features without feeling compelled to do so. If you’re one of those people who uses all of the filters on the camera every day, fine, but I’m willing to bet that you just use your phone for Facebook, texting, and calling your grandma.
You don’t need a 5.8-inch, all-glass, basically-a-tablet-of-a-phone to do those things, but if money doesn’t mean anything to you, be my guest.
It’s also worth noting that there is a certain point at which “really fast” and “really, really fast” feel identical to one another. My personal experience with this phenomenon was with the iPhone 7 and the iPhone 8; it doesn’t matter how fast your newest processor is if the last one was fast enough.
Apple has a long history of publicly executing things that people are still using. While it’s hard to be too mad about the headphone jack, they hit a soft spot when they nixed ethernet ports—and, more recently, USB 3.0 ports—and the most recent dissident to fall victim to Apple’s indiscriminate chopping block is the Home button.
Yeah, that thing that make the iPhone usable in the first place? Not there anymore. Worse still, the simple display is now flooded with different shortcut hotspots. For example, you swipe up from the bottom of the screen to open the Control Center — no, wait, that’s how you get home. You swipe from the top-right corner of the screen to open the Control Center, while the top-left corner opens the notifications screen that — hey, are you writing this down?
To make matters worse, Apple added a bunch of different contextual shortcuts to the physical buttons on the sides of the iPhone X, further reducing accessibility. I could go on, but I think you get the point.
Is the iPhone X necessary? Absolutely not. Is it neato? Sure.
But is it worth your time if you’ve got dollar bills to blow? Again, absolutely not — do literally anything else with that money, up to and including burning it. As long as Apple continues to ignore the issues that plague their devices in favor of broken facial recognition and 3D emoji animation, consider spending your money elsewhere.
Think LuLaRoe is a pyramid scheme? Founders say your opinion’s uneducated
Social media giants are trying to operate without human controls but are failing
New stats behind mobile addiction and how people are coping
Our five faves for Friday – almost Thanksgiving edition
Class action lawsuit claims Tesla plant is a hotbed of racism
Red Ventures acquires Bankrate, layoffs commence
All I want for Christmas is some Nuheara ear buds
Wall Street wants to formally jump into Bitcoin waters
LuLaRoe in $1B lawsuit for shady business model
Disruption vs destruction and AI’s use of both
Amy’s Ice Cream founder on Austin’s business risks and rewards #WhyAustin
Turns out a lot of people are in between introverted and extroverted
P. Terry’s founder on the booming economy in Austin #WhyAustin
Ladies and gentlemen, the U.S. National Anthem
Indeed President, Chris Hyams tells us #WhyAustin [video]
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