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Real estate industry disillusionment – as much as things change they remain the same

Folks like Glenn Kelman of Redfin find themselves in a quandary. They set the bar so high (as any great CEO would) but must now adapt to market conditions and they must guerrilla style compete once the enthusiastic startup hyperbole subsides. Truth be told, Redfin has lowered it’s voice quite a bit in recent years and buckled down, becoming a serious contender in the real estate space. The noble concept of buying loyalty via much publicized (mostly demonized) commission rebates isn’t really enough in a down market. Getting attention is much more difficult when the housing market is struggling and hyperbole really isn’t being sought. What is being sought? Truth. From all sides.

Although most real estate spectators, including myself, balked at the idea that Redfin could really do much differently with a 100+ year old industry that’s been tested, retested, and is about as pay to play and corrupt as Washington DC itself (and that’s saying something). There have been many things Redfin has pioneered that have certainly given meaning and inspiration to many of the one plus million practicing competitors in the space.

The rarely spoken (except for here at AG) hope is for theirs (Redfin) and others’ continued success in asking why not and then doing it their way, pass or fail. The issue with this is actually when they (not specifically Redfin but any company) fail, reset the bar, walk back statements or promises- it’s going to get peoples’ attention. This is the reality of being a leader, ask any U.S. President in history, especially those in recent years that have experienced the 15 second news cycle of modern media.

I warned against this in 2007 about making the practice of real estate political in an #occupyrealestatecommissions type of strategy. No one listened until 2009 when the real economy busted through the hyper markets of years past, then suddenly leadership turned to survival of the leanest- especially when companies like Redfin fit more into the one percent category than the 99 percent (after all, not many other small brokerages can tout $46M in funding).

The disillusionment is an early adopter’s issue; it’s painful and irritating, especially when others are looking for that winning way forward and see a leader pivot and do something more traditional. Sometimes, portraits just don’t turn out they way they were originally conceptualized.

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Benn Rosales is the Founder and CEO of The American Genius (AG), national news network. Before AG, he founded one of the first digital media strategy firms in the nation has received the Statesman Texas Social Media Award and is an Inman Innovator Award winner. He has consulted for numerous startups (both early- and late-stage), and is well known for organizing the digital community through popular offline events. He does not venture into the spotlight often, rather he believes his biggest accomplishments are the talent he recruits and develops, so he gives all credit to those he's empowered.

26 Comments

26 Comments

  1. marlowharris

    November 17, 2011 at 7:59 pm

    Maybe Redfin will try some other new and revolutionary type of guerrilla marketing such as doorknocking and mailing out "Just Listed" cards.

    It's often easy to see how someone else is doing it wrong and to presume that if you were in charge, you'd do it right. But that attitude assumes that you're smarter than those you're trying to upstage. Perhaps the more traditional full-service firms are not as completely inept and inefficient as first thought.

    I'm all for improvement, moving forward and change, but not everything new is an improvement, and change for change's sake is not a philosophy that always leads to success.

    I love Redfin's user interface, and Estately's is even better. Other Washington State brokerages have stepped up and improved their websites too. But I find a lot of other sites clunky, slow and/or difficult to use, including Realtor.com, Zillow and Trulia.

    But as Redfin has found out, it's not necessarily about who has the best technology. Turns out all agents are selling the same thing from the same inventory. It's as much high-touch as it is high-tech and personal relationships often still trump those who have the best website.

  2. Ken Brand

    November 17, 2011 at 8:35 pm

    Let's hope they're not through painting their canvas, and that their challenging-persistance pushes us all forward and upward in action-reaction. Great share Benn, thanks.

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