The Technology has Arrived, Seven Years after the Bust

The dotcom heyday of the late 90's  was remarkable because it was characterized by a work force of youngish entrepreneurs building businesses with no previous experience. When the tech bubble burst in 2000, the tech diaspora scattered the work force, especially in ground zero Silicon Valley.

Some of the tech refugees - well educated and ambitious - were attracted to the entrepreneurial challenge of a real estate career... but they still had to build that essential "referral network" from scratch. Real Estate 1.0 didn't have much impact in providing the tech-savvy newcomers any advantages over old school Realtors beyond the creation of a static website, and sending listings and CMAs to clients via email.

Now Real Estate 2.0 has brought in a whole new set of entrepreneurial techies running Zillows and Trulias, most with little to no real estate experience, and they are upending the industry. Why now? Consumers are accepting and responding to Web 2.0 applications because they make property search and data research easier. Tech entrepreneurs can now build them faster and cheaper - applications that cost millions to build in 1999 can now be cobbled together in a month. Marketing real estate technology products to the real estate community has become a brand new business opportunity that techies are better adapted to doing over the Realtors.

New Realtors today now have the chance to leverage new technology - blogging, video, online marketing, social networking, transaction processing applications - to jumpstart their business. This is a turning point... finally technology is delivering on the promise to chip away at the market share from the majority of old guard Realtors who don't or won't adapt to technology.

Technorati Tags: , , ,


What did you think of this article?

  • No trackbacks exist for this post.
Page: 1 of 1
  • 2/14/2007 7:19 AM Kevin Eves wrote:
    >"...finally technology is delivering on the promise to chip away at the market share from the majority of old guard Realtors who don't or won't adapt to technology."

    Really? Delivering? Re-stating, re-positioning the promise, I'll give you. Delivering on actually taking market share? Evidence please.

    Web 2.0 has a lot of promise, and there are interesting applications, but up-ending the status quo or the traditional market makers? Not seeing it here yet.
    Reply to this
    1. 2/14/2007 8:51 AM Pat Kitano wrote:
      Thx Kevin, it's a matter of semantics but we're riding along the same idea. My premise is that in 2001, Web 1.0 conveyed almost no advantage to new realtors entering the business, today new realtors have Web 2.0 tools to help them jumpstart their business. I can see you understand the promise of Web 2.0... upending the status quo may be too strong a wording, but the point is along that direction.

      Reply to this

  • 2/14/2007 9:09 AM Kevin Eves wrote:
    In the early days of Web 1.0, the theory of first-movers, early-adopters, market-disruptors thrived. And there's no doubt they are crucial species to the ecosystem and for getting sufficient momentum to cross the chasm, drawing of Moore, but once these concepts and opportunities hit the mainstream, and the corporate giants become aware of the threat, and/or the opportunity, what happens to the first-mover?

    There seem to be two models of success; sell to the giants, or move on to the next innovation opportunity.

    You still have to build, and maintain, a referral network -- Web 2.0 provides new tools and a potential for greater efficiency. The foundation of real estate as a relationship-based market doesn't shift, and the core principles and strategies aren't overthrown. Tactics and understanding of new means of interaction between people; yes. Rich opportunity to benefit from that, and an opportunity for the individual/niche/small business, absolutely. But that's part of the cycle, and part of the nature of relationship-driven markets.

    Cost and efficiency have their place, but trust and performance remain the essential.
    Reply to this
    1. 2/14/2007 9:19 AM Pat Kitano wrote:
      110% agree on the basics of building a business based on referrals and relationships. The key to Web 2.0 for a brand new realtor is the ability to begin building that new business with a variety of Web 2.0 concepts (blogging, social networking) and tools (video, etc.) that will help them get positioned and marketed to their focus client base. Second, some of these tools, blogging for example, enhances a new agent's SEO profile and eventually will start getting leads that they normally would not get if they pursued a non-Web 2.0 strategy. The best part about Web 2.0 is the tools are generally low cost or free.

      I wrote about the myth of the first mover advantage in real estate last year... your perspective on this mirrors mine.

      Reply to this

  • 2/16/2007 10:29 AM Marlow Harris wrote:
    I have to agree with Kevin.

    I would like to think I'm in or pretty close to ground-zero here in Seattle. I have half a dozen blogs and another couple of websites with great pagerank for my area of real estate. However, 90% of my business still comes from referrals and relationships. More to the point, in looking at the top 10% of real estate professionals in my area, none have more than a personal webpage, if even that. ALL of their business comes from relationships and referrals. "Average Joe" is not finding his Realtor online. I'm not saying it won't change, but I don't think it's happening as fast as we think it will.
    Reply to this
    1. 2/16/2007 10:38 AM Pat Kitano wrote:
      Wow! that's really insightful coming from you, Marlow... you're completely wired into this new paradigm.  I'll have to rethink this...

      Reply to this

  • 2/16/2007 11:56 AM Michael Price wrote:
    I would argue that the technology has always been there in some form or fashion. The real shifts are varied in their degree of impact. I would say the primary shift is the increase in web eyeballs combined with widespread consumer adoption of the web as a place to do business. I remember in the early days reading predictions of advertising dollars, consumer dollars and more that would be generated as "e-commerce". Those predictions have been eclipsed many fold. In 99 I worked with a company that developed a complete web, customer relationship management, listing management/enhancement, back office whiz bang "Web Based Realtor" system that used many of the same type of programming and database tools that are used for "Web 2.0" applications. We had paying customers in Texas and good business model. When we went to San Francisco for a trade conference to present it to prospects, they all wanted to see our business plan and get in on the friends and family program of an IPO we never planned on. It was sad. It was also ahead of it's time and I'm one of the few people that decided not to shell out big legal bucks for a private placement memorandum or jump on a road show bus to pitch to the VC community. Looking back, the product didn't succeed because the world wasn't ready, but the concept has lived on. I think you'll see some bonehead VC money come back in the space, in fact I can point to a few recent investments in the 10's of millions that have me scratching my head. I don't think there will be another bubble, just a lot of small explosions as the VC guys have less tolerance of the burn rates of the past. One can only hope if we ever decide to go the VC route in my new endeavor, the fact that we are generating revenue may not seem such a strange concept this time around.
    Reply to this

  • 2/16/2007 6:02 PM Kevin Eves wrote:
    I'm just across the Bay from you Pat, and and I'm sure you do a better job of tracking local blogs than I do.

    First, I'll pose a question: what does an existing, seasoned agent gain by adopting Web 2.0 strategies? Or even more plainly, what do they can with transparency? And here's a challenge as well -- with all the disclosure requirements involved in all aspects of real estate, what transparency is missing?

    Here's an interesting data point, and a potential opportunity for Marlow up in Seattle. The number 1 organic search result on google for 'berkeley real estate' does lead to the blog of an East Bay realtor. He doesn't do a a lot of deals himself as seller or buyer agent. He does make a lot of referrals, and gets a piece from each one.

    He would lose, not gain, from transparency. The clients might as well, as they might have a harder time finding an appropriate agent without his knowledge of the local opportunities. The other agents lose, as they'd either have to have their own websites and pay attention to the issues they present, and they might lose the deals they get from him.

    Look at Linked In. I can see you on Linked In (and you me), get some basic information (which may or may not be current), see how connected we are (3rd degree), and how many connections you have (38). But I can't see your connections. You control your level of transparency.

    The same is true in the real estate business. Arguably, those who gain the most from transparency is those who opt-out. They gain the benefit of being able to observe others, but not be observed.

    I believe review sites, like Yelp!, could lead to more radical transparency, by putting reputation of relationship-oriented service providers online. But.... do a search on for Real Estate in Berkeley, CA, and see what results you get. Not terribly useful. (though good news for Red Oak Realty).
    Reply to this
    1. 2/16/2007 7:19 PM Kevin Eves wrote:
      The English major in me always cringes when I re-read something I post, and find the inevitable grammatic flub I make when I revise and don't proof-read. Ah well.
      Reply to this
      1. 2/19/2007 1:06 AM Pat Kitano wrote:
        I sometimes have the same reactions when I make comments too.

        All you say is quite valid... transparency can spoil parties. And it depends upon which side of the sero-sum game you're playing on.

        Reply to this

  • 2/21/2007 5:39 PM Laura Kaan wrote:
    I think technology is the wave of the future, yet having the ability to use technology with current older marketing styles can really help give you an edge, boost your client base and increase your branding as the local expert.
    Reply to this
    1. 2/21/2007 5:43 PM Pat Kitano wrote:
      Wholeheartedly agree Laura!
      Reply to this

  • 5/19/2007 12:02 PM JeffX wrote:
    Here here Pat!

    Well said, very clear and succinct. Its hard to articulate (new) technology's to those who don't readily use and thus understand them...

    Most professionals I speak to in the real estate services industry (well, most people) relegate themselves to believe in only to what they know i.e. experienced, for better or worse, usually for worse.

    Unfortunately this mentality is fostered and hard-wired into most of your real estate licensing/education curriculum's...
    Big (Real Estate) Brother doesn't want anyone (especially visionaries) upsetting their apple cart.

    I can't help but think back to a quote from Teresa Boardman, that said (paraphrase) Zillow, Trulia, etc. were created in spite of the traditional agent, as you say, by 'techies' who have little to no real estate industry experience.

    There are huge opportunities for RE professionals to adopt and even develop new technologies for the betterment of an antiquated and still fragmented info-exchange model, here in the age of the Mash-Up.

    If seasoned pros would stop wasting precious mental energy dismissing or depreciating new technology and instead looked forward to innovate better solutions for themselves and those of similar ilk, they could probably relegate the Zillows and Trulia's to 'yesterdays news'.

    Vision is hard to see....

    Reply to this

Page: 1 of 1
Leave a comment

Submitted comments are subject to moderation before being displayed.


 Email (will not be published)


Your comment is 0 characters limited to 3000 characters.