Leaonard, you ask how the brokerages are supposed to compete, and my opinion is this. Brokerages can offer something that the technology companies cannot….brokerage services. One of the technology companies biggest challenges has been effectively connecting the agent and buyer/seller via their technologies. After all, for a tool to go from “cool” to useful, that is what has to happen. I’ve reviewed just about every real estate technology there is, and I am very comfortable saying that there is very little that a brokerage couldn’t do if they really wanted to. They would have such a tremendous advantage not having to rely on ad revenue for their technology to be successful. They would be able to tap into the biggest pool of money in real estate, which is the revenue generated from a transaction.

I look forward to reading your blog post Brian. Please excuse the plug but I wrote this a few weeks ago on my plane ride home from the RIS technology conference. http://www.incredibleagent.com/blog/?p=71

Needless to say I was frustrated when I wrote it.

You can’t see forest for the tree’s.

You have a bad case of technological myopia my friend.

What is the head of one of these brokerages gonna say to his board when he gets rocked by his competitors because he allocated to much time and resources to building a online community/application platforms to help a community who has largely shuttered at the sight of technology. Its much more than just code and engineering , its a massive marketing effort to make the community even embrace such tools.

Not that it’s not worth it , I whole heartedly agree with you that it is. But they are business men who have boards to answer to and bigger fish to fry.

And you still didn’t answer the part about how any of these smaller RE tech firms plan on competing with zillow. Who will I’m sure aggressively market and push THEIR BRAND to get over the hump and push back from the massive RE community. How can any the RE startups hope to compete against that?

I have owned two different real estate brokerage franchises and in exchange for your money a franchise purchase buys you two things:
1. A brand.
2. Systems.

If you really think about it, these are the only two things that separate franchise brokerages from independent brokerages. This is why the major franchises all look the same today. They all have watered-down, unenforced brands that look exactly the same and they are all offering either a gateway to or a discount to the sames Silicon Valley technologies.

I am writing another blog post about Redfin basically lamenting that it could have been something really special had it not decided to define itself as “cheaper than the other guys and a great website.” With more patience, they could be positioned as an emerging national brokerage to be reckoned with due to their leadership in technology innovation.

Mr. Millstein’s opinion that real estate brokerages should not be focused on real estate technology development for their brokerages is probably the justification that these national players are using to instead spend their billions on fluffy television ads that yield no direct benefit to their agents.
Technology is most important ingredient.

Which is precisely why a brokerage, even a very small one, that embraces — dare I say exploits — technology can run circles around the old schoolers.

Based on your logic Clark construction should make a contracting & construction social network. It’s not what they’re good at and its too risky and potentially not rewarding enough for them to get good at it in comparison to the revenue they get by focusing on there core competency.

I think it has to be done by a ‘outsider’ to avoid conflicts of interest.

To David G:

I didn’t mean it in that sense , I’m sure its going to only help the RE professional. I meant it just might be the online community that kind of wraps up all these niche residential real
estate communities/ online products into one immersive platform.

Example:

If I can take my zillow profile and with a press of a button generate my agent home page , why do I need uberator?

Example:

If I can mix in zillow’s already massive data collection with social aspects and ‘spheres of influence’ why do I need zolve?

Thats what I meant by ‘coming to eat everyones lunch’.

Thanks, we’re stoked and plan to keep pushing the envelope.

Leonard –

We’re a media company. Our job is not to steal your lunch but to feed you business. Please check out your advertising options on Zillow:
http://www.zillow.com/ezads/GetStarted.htm?s_cid=ez-site-adwithus