Second Mover Advantage exists in Real Estate 2.0
At Inman News Blog today, I discuss how the First Mover Advantage is elusive in real estate... the industry adopts new products so slowly that it can take years for product acceptance, during which time the competition can easily copy cat the first mover.
The second mover advantage exists in real estate 2.0. The corporations - i.e., brokers, lenders and title insurance companies - are constantly reacting to the first mover business models of Zillow, eLoan and Redfin, but in the end, they have the advantage of their status quo relationships and corporate / financial resources to 1) develop a copycat business model, 2) partner with the first mover, or 3) acquire the first mover. The obvious hurdle the corporation as second mover will face - second mover thinking requires the same kind of business creativity as first mover thinking because it's still a new and evolving business model. Corporations will still need to recruit management who can break the mold.
| First Mover | Second Mover | |
| Business focus | Innovation | Satisfying user experience, cost control |
| Business model | Does groundwork for identifying distribution channels and developing sales and marketing | Must out-execute first mover business model. Has the advantage of studying this business model |
| Marketing / branding | Once initial brand established, must ensure brand stays cutting edge | Second movers can
often feed off "co-opetition", their mere existence gives the customer
a market choice, and thus increases their visibility |
| Customer Education | Green field | Must develop competitive advantages for customer to choose them over first mover |
| Advantages | Can potentially dominate the market from the outset | - Easier and less costly to copy cat - Benefit of watching first mover mistakes - Business relationships may already be well established |
| Profile | Technology based companies that launch product and then learn on the job | Big corporations |
Technorati Tags: second mover advantage, real estate 2.0, zillow, redfin
A friend of mine recently wrote about NAR's (& industry leaders) slow response to advanced technology and web 2.0. Thesis is that they are to a large degree responsible for the creation of 3rd party sites like Zillow, etc. Thought provoking article and I agree with much of it....
http://www.realestatewebmasters.com/blogs/ryan-ward/1118/show/
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Excellent article.
Similarly, google was not a first mover, second, third, or even fourth. Today, google is a clear leader.
First mover engines were Wanderer, Webcrawler, Yahoo, altavista, infoseek, lycos, and now google.
The current real estate industry mirrors that of the early years of the search engines. For the most part, consumers, agents, and brokers have only begun to learn how to "effecctively" use the internet post the broadband/dsl adoption.
It's fascinating to watch how first movers spend their money and learn from the mistakes they make.
I'm glad the doors have finally open for new opportunities.
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The customer education entry should be reversed in effect. The firstcomer must spend lavishly to bring the customer around, while the second mover can simply draft in for easy pickings. You're right about getting something just for showing up - for being another chioce.
Additionally, in the case of Redfin as first mover (they're not, but so many portray them as such), the second mover will reap great market education without antangonizing all the other co-workers that one depends on to make the model work. That alone is worth half the VC money RF has raised! Thanks Madrona & Vulcan et.al.!
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Hello,
We just got a new site through http://www.real-estate-designers.com do you recommend print media or internet pay-per-click advertising for our new real estate website? Please advise. Thank you.
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Adoption of new ideas and technology in the real estate industry will prove to be most difficult and incomparable to the airlines, stock trading and books, cds, etc.. due to the hesitation by the one million + participants that wear the realtor hats. If these one million don't adopt there is little hope for industry adoption.
This will be a challenge when compared to the handful of airlines, phone companies, and book stores.
My hats off to RF and their conviction to change. But my dollars will be invested in simplicity.
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A combination of factors will come into play in terms of which models and companies come out ahead, but ultimately consumers will decide whether a new model stays or goes. If travel agents had the say, Travelocity wouldn't be here today.
Real estate has been fairly slow to adopt Internet innovations when you compare it to other areas of financial services on the web. The transactions can be complicated, but consumers are saying they want a different model and now they are getting the chance to try with Zillow, Trulia, Cyberhomes etc.
(I wouldn't lump eLoan in with them though they were first movers ten years ago...they're Online Mortgage 1.0 and 2.0 is just beginning.)
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