The point of my title might not be obvious, and it’s not meant to discount youthful exuberance — God knows we need youthful exuberance. However, Peter Pan and Michael Jackson aside, we all grow up. What does that mean — grow up? I take its meaning as maturation, becoming wiser, thinking long term, becoming responsible to self and others.
Organizations, even countries, like individuals, seem to go through the growing up process — from infancy, to childhood to adolescence to young adulthood to middle age to the twilight years. If companies and countries can continuously reinvent themselves between young adulthood and middle age that’s a good thing. The analogy with individuals breaks down here, for the most part, because individuals can only “remodel” so much before the realities of age take over completely. However, individuals can stay fresh in mind and spirit for quite a long time through constant learning, reflection and openness. This freshness of mind and spirit coupled with maturity and wisdom is an attractive combination in individuals — these are the people I gravitate towards.
RE internet companies seem to be in their mid twenties. There is an emphasis, a feel, a persona, if you will, of “youth” with companies like Redfin, Zillow, Trulia and the rest. What is their phiolosphy? It’s like most 20 somethings; it’s a mixture of style, doing good, distrust of tradition, worship of change, but very little mature, rational long term vision. Unlike Realtor.com, they play their music loud, dress in t shirts and jeans, talk funny and love to give stuff away to their buds.
They are the RE version of Google starting out, just doing stuff with no business model, having fun, being different with an attitude and declaring like grandiose young mini-gods they will “Do No Evil“. Oh, I’m sure there are grown ups developing plans and thinking about making money, but this is the sense, the feel, I get from these companies.
Do they have to “grow up”? Can they survive in the business world by hanging out with their friends, creating stuff and giving it away? They will make more and more friends, that’s for sure, but can they make money. Google eventually had to do more than avoiding doing evil — they had to monetize their efforts. Redfin, of course, is monetizing their efforts, but they’ll have to prove their model will bring in enough money to survive. You can be popular in the public eye by saving the public money, but investors’ eyes are also looking and saying “Show me the money!” I think they can do it on volume, but their immature service structure will have to be built from more visionary, mature plans.
Zillow and the rest can get deep pockets to fund their youthful experiments but at some point there will have to be a return, some evidence they can make money by having fun and giving stuff away. Ads? I don’t think so. I think ads are one part of it, but there has to be some special value added services that are unique and useful enough for consumers to pay for. I mean, if having fun creating stuff and giving it away can create enough ad money to be successful, you’ll see a bunch of companies playing air guitars all across the web making it all a little thin. How is one to rise to the top and build a business model that will be the standard.
First there is chaos, then there is experimentation and then there’s a standard. Who will set the standard? How will it be set that’s profitable? Growing up is painful and entails hard choices. At some point the RE companies will have to make hard business choices that are based on real finances, on models that can be sustained. Somebody, somehwere along the line will have to PAY. Oh my God, now you’ve ruined the whole thing. We were having fun until you brought the almighty dollar into it. Does it mean everyone will have to wear a suit and be on time at business meetings? Do we have to sell out to The Man and become corporate lackeys? But people love us, we’re doing good, we’re making it real, man!
Yes, but while you’re making it real can you make a little money while you’re at it?
Damn, I knew it would come to this — it always comes down to making money. I’ve had it – I’m outta here — I’m going to where they still have fun creating stuff and giving it away.
Seriously, though, I think these companies can have their cake and eat it too. They can have fun, create stuff and give it away, but they need to build a higher level service that is charged for — a unique service that is personalized and immediately useful. It could be along the lines of relocation services built on personal sites, packaged with personalization and local context, or it could be something totally different, but I think a higher level that earns a fee for use will be necessary.
It’s time to grow up, yet keep the youthful exuberance. Money making is a real concern, and not near as dirty as imagined.
Louis Cammarosano says:
Mike
Since last summer I have been wondering whether we have reached dot bomb status where people are going to start questioning the long term viability of these new web 2.0 companies.
Todd Carpenter pointed out to me that web 2.0 is about empowering the individual not companies.
A true statement as it appears individual are making money employing web 2.0 strategies, but companies are not….
The criticisms leveled against homegain can equally be levelled more forcefully against Zillow and trulia.
After all are they not chokeholds in training? Do they not take realtor data in the form of listings and then try to sell it back in the form of featured listings or by selling ads around it?
(BTW-hg doesn’t take listings-our buyerlink product drives visitors to the realtors’ own sites where THEY display the listings)
Are Zillow and Trulia not also striving to become chokeholds – ones that have an acceptable face as they tout web 2.0 concepts like transparency?
Yet Chokeholds just the same.
Be careful not to characterize Zillow this way-afterall they are sponsoring the unchained conference…
March 26, 2008 — 5:28 pm
Greg Swann says:
> Be careful not to characterize Zillow this way-afterall they are sponsoring the unchained conference…
For their money, they’re getting the right to associate their brand with ours. Content control at BloodhoundBlog is not for sale at any price. If you doubt this, read category #25 — and be grateful I haven’t paid any attention to Homegain. I admire how game you are, and I think your attitude speaks well for you. But you are accusing BloodhoundBlog — and me specifically — of corruption. This is outrageously false, but, far beyond that, it’s simply outrageous.
March 26, 2008 — 7:04 pm
Louis Cammarosano says:
Greg
No way no how am I accusing you of corruption!
What I am saying is that ALL companies if I read your analysis correctly are or have the potential to be a chokepoint between consumers and real estate agents.
Zillow, like homegain is a “vendor” as you like to call us.
Greg I don’t think you are doing anything “corrupt” -I beleive you are selecting your sponsors on the basis of like mindedness and common purpose. After all Zillow is “2.0” like you guys”.
However, I would caution that if the purpose of the conference is to show realtors how they can directly connect with their consumers, trotting out Zillow, a company, as a facilitor of that process seems counterintuitive. (but not corrupt!)
March 26, 2008 — 7:10 pm
Louis Cammarosano says:
Greg
Forgive my ignorance, what is category 25?
Please direct me there so that I might educate myself.
March 26, 2008 — 7:31 pm
Barry Cunningham says:
And I thought my exchanges were fiery…
If I could chuck in a couple of pennies from left field, I have been in the event marketing buisness for nearly 20 years. When I have sold sponsorships it is because the sponsor feels the exposure (both in advertising and in live attendees) benefits the brand by an affinity of association.
That’s why Budweiser sponsors football games. They know that the people who frequent football games and go to football games more than likely drink beer. From an experiential marketing perspective, If you go to a football game, and drink beer AND have fun, then the affinity attaches even more closely.
I am not involved in any way with Greg’s dealings with Zillow, but I would suspect that the Zillow brand, like the Budweiser brand at football, thinks that they can align with Unchained attendees and that said attendees represent the demographic audience that Zillow is trying to reach.
That being said, it does not give the appearance at all of corruption.
For that matter I will provide information for both Zillow and Homegain to forward their checks to Real Estate Radio as we deliver an audience they most assuredly would like to be aligned with and can enhance their brands.
Didn’t think I was chiming in without making a pitch did ya?
March 26, 2008 — 8:04 pm
Greg Swann says:
> I would suspect that the Zillow brand, like the Budweiser brand at football, thinks that they can align with Unchained attendees and that said attendees represent the demographic audience that Zillow is trying to reach.
My understanding is that they feel that the people coming to Unchained will be early-adopters of Zillow’s offerings and will lead others in their home markets to become users of Zillow’s products. I will be teaching Zillow marketing tools, but I would have taught the stuff I’m going to be talking about — all free except for the labor cost — with or without the sponsorship. We started talking about — and implementing — these ideas before Unchained was a gleam in Brian Brady’s eye.
March 26, 2008 — 8:32 pm
Louis Cammarosano says:
Barry
Your point is well taken. The sponsor is NOT to be mistaken for the event that it sponsors.
In my comment I was pointing out that there is a delicate line however between companies and their sponsors. The company has to be careful always NOT to upset or offend their sponsor. That is just business.
Real Estate Radio probably wouldn’t want to take a consistently “anti Zillow” or “anti HomeGain” stance if it expected advertising dollars from either entity.
However, I am sure that stance would not extend to censoring guests on your show that might say something not favorable to either company. It might however, factor into your selection of guests in the future.
There would be nothing wrong with altering your selection of guest criteria but rather would relect a practical business decision.
By the way what are your rates?
March 26, 2008 — 8:37 pm
Greg Swann says:
> What I am saying is that ALL companies if I read your analysis correctly are or have the potential to be a chokepoint between consumers and real estate agents.
This is simply incorrect, at least right now. Trulia has some similarities to Realtor.com, but at a radically lower price point. And both Trulia and Zillow provide no-cost ways for professionals to engage directly with consumers. Both companies, as they are run at present, are much more like magazines than they are like lead vendors: They bring consumers and vendors together and collect a premium by selling advertising. It’s plausible that either or both could attempt to become lead vendors in the future — but it seem much more likely that today’s lead vendors will work to become more like Trulia and Zillow.
In any case, we do not shade our interpretations of the facts we observe for anyone, not ever, not for any reason. We say whatever we want, whenever we want, and we don’t give a rat’s ass who doesn’t like it.
Category 25 is Zillow.com. We’ve written more about the company, both good and bad, than anyone in the world.
March 26, 2008 — 10:07 pm
Mike Farmer says:
And, I’m not anti-Zillow — I just believe that all RE companies are going to have to come up with business models that make money. I’m all for giving consumers free stuff, but at some point there will be a demand to show good profits, and right now I don’t see how all these companies can survive — not just Zillow, but all of them, and I keep seeing start-ups.
My point was the growing up process — it seems now is the time for one or two RE companies to lead the way and set the standard re: how to make a profit and grow to full potential.
There is a lot of potential for vertical search to become something special in RE and help all of us. Perhaps some companies will simply provide good tools and entertainment, draw traffic and sell ads, but I seriously doubt if this business model will have long term success.
I think it will take brave innovations that add enough value that consumers can be charged for the service. Until consumers are willing to pay, I don’t think the potential for growing revenues to the point of long term success and GROWTH can be fulfilled. From what I’ve read about the modern business environment, growth is in again — to differentiate and grow, rather than defensively survive another couple of quarters.
March 27, 2008 — 4:22 am
louis@homegain.com says:
“In any case, we do not shade our interpretations of the facts we observe for anyone, not ever, not for any reason. We say whatever we want, whenever we want, and we don’t give a rat’s ass who doesn’t like it.”
And you would think to do otherwise would be corrupt right? 🙂
March 27, 2008 — 10:43 am
Greg Swann says:
> And you would think to do otherwise would be corrupt right?
In matters of moment, yes, of course. People trust us to speak the truth. I would not betray that trust for anything.
March 27, 2008 — 11:03 am
Louis Cammarosano says:
That’s good to hear!
March 27, 2008 — 11:09 am
Wayne Long says:
It is hard for me to understand where the Zillow model is headed at this point. Where do you think they want to end up? Are they after the traffic to sell advertising or are they after leads to refer? Some combination? Build traffic to sell out?
March 30, 2008 — 11:07 am
Louis Cammarosano says:
Wayne
That’s a great question. Zillow has raised $87 million to date and no one is quite sure what their model is.
Seems that Rich Barton is getting involved in other ventures with Glass Door.
I would think they would need him 100% focused on Zillow at the moment.
It seems to me selling ezads, banner ads and a few spots around real estate “hot or not” photos isn’t going to generate enough revenue to achieve or sustain a profit.
March 30, 2008 — 11:22 am
Mike Farmer says:
Does anyone have any idea what Glass Door is about?
March 30, 2008 — 12:58 pm
Louis Cammarosano says:
“Employment Conditions in the Workplace”
http://www.pehub.com/article/articledetail.php?articlepostid=11107
March 30, 2008 — 2:09 pm