Gary Vaynerchuk, of Wine Library, is a tremendously entertaining speaker. And he spoke at Inman NY this past week. While we wait for the official video from the good people of Inman, I found this… what do you call it, bootleg conference speaker video? on this blog post by Sue Adler, a realtor who actually works my market. (*wave* Hi Sue!)
Watch the whole video — I’m not going to embed it here, since you can view it on that site.
Gary Vaynerchuk — known more colloquially as GaryVee (his Twitter handle) — is an incredible speaker. He’s full of passion, full of entertaining stories, and definitely has the gift of gab. He is a superstar in the making. I found his Inman talk to be spirited, tremendously fun, and inspiring in many ways.
Unfortunately, for realestistas who must toil in the real estate industry, I felt that he ultimately failed to convince. Well, at least me. Which might be a good thing for GaryVee and his acolytes.
What is especially unfortunate is that Gary’s charisma and natural storytelling skills pose a danger for realestistas trying to figure out what’s what with all this social media stuffzorz. He makes points that are, on the surface, extremely appealing, and makes them in a very appealing way. If he had been a worse speaker, perhaps the seduction would be less.
Ah, but that’s where I come in, playing the killjoy party pooper. Let’s get into it.
Gary’s wide ranging speech had a number of themes, but for me, there were three major ones that are directly relevant to realestistas: Radical Transparency, Building a Community, and Personal Branding.
On Radical Transparency
Gary is passionate about transparency. He goes into it, calling some wine in his store “like putting horse crap directly into your face”. And he makes some very valid points. 22-year old kids are showing up in his store asking about some rarely-heard varietal wine; consumers have the information. Why bother trying to hide the info from them?
On the one hand, as a proponent of Cluetrain marketing, I am 100% for this method.
On the other hand, realestistas work in real estate, not in wine. They are often prohibited from being transparent by law.
Yes, as Gary says, you can kill your brand in about 30-seconds because you’ve BS’ed the client. At the same time, things like Fair Housing Act and state regulations make it impossible for a realtor to be totally transparent. Business realities often make it impossible for a realtor to be totally transparent.
For example, say you’re a realtor in Camden, NJ which is the ghetto that other ghettos look at and go, “Damn!” It used to be the most dangerous city in the United States; it is now the second most dangerous city in the United States. Yippee?
What exactly do you say? What could you say? “Up and coming neighborhood? We used to be the worst, but we’re now the second-worst?”
Your client has listed with you to represent his house for sale. You owe your client a fiduciary duty.
So “radically transparent” realtor would talk about how the home is located in an area whose crime index is 983 vs. a national average of 320?
More prosaically, and we’ll return to this, while one bottle of 2005 Chateau Magrez Fombrauge is pretty much the same as every other bottle of 2005 Chateau Magrez Fombrauge, no two houses are alike, even if they are right next to each other, built by the same builder, in the same year, using the same materials and workmen. This is especially the case when your client, as a realtor, may have provided you information that really should not be disclosed ethically.
For example, you may know that your clients are going through a divorce and that is the reason they are selling, and because of acrimony, they’re willing to sell the house for pennies on the dollar.
Do you become “radically transparent”? If you tell the buyer or the buyer’s agent that your clients are happy to take any crappy offer, I’m sure you could do the transaction quickly. The answer is, of course not. Unless you like lawyers, courtrooms, and depositions at least, you don’t.
I do think Gary’s ultimately right. Not providing consumers with information simply drives them to other sites where consumers can find the info. Working at Onboard Informatics, I happen to know that some of our broker clients don’t want to include crime stats in their neighborhood information. They’re afraid that it will be seen as steering, or reflect negatively on their listings, etc.
I’m like, “So you think a consumer can’t find out crime data from other sources? You think she hasn’t already before she called you, and is now asking pointed questions about violent crime per thousand in your zip code?”
But as long as those certain laws, regulations, and common law principles (like fiduciary responsibility) continue to exist in real estate, there are clear limits to transparency for realestistas. Is this something that NAR should possibly take a look at in their government relations activities? Possibly.
This is a point that many in the audience really responded to, and I think it’s seductive.
The notion that a realtor can, through the power of social media, build a personal brand (“not an option, but a necessity” in 2009) with a passionate, engaged community is incredibly seductive.
The idea that all you have to do is get a $300 video camera, and like Gary does (which he invites the audience to do) do a daily recording of houses, and so forth is really appealing.
But here’s the cold reality: just because you call a group of individuals a “community” doesn’t make it one.
A community, at a minimum, has to have some sort of a shared interest that sustains their interactions. Wine drinkers have that shared interest — namely, in wine. Poker players can be a community. Comic fans are most definitely a community. Realtors can be a community.
A bunch of shoppers do not make a community. Especially when they (a) share little else, and (b) are active, on average, every seven years.
You can “care about your customer” all you want. You’re not seeing him again for another seven years. A wine drinker can buy a bottle from Gary, then come back and buy another bottle a week later. No one is buying a house, then coming back and buying another one a month later.
And someone who is a buyer today, is passionately engaged in learning all he can about the neighborhood, the house, home values, what to look for, etc. etc. becomes just another homeowner who could care less about real estate next year.
The Seven Year Cycle is a phenomenon that really differentiates real estate from other industries. It really does so little good to compare business models and social media techniques from industries that do not share this fundamental factor with real estate.
The only really good analogue I can think of to real estate is the wedding industry. They might even share the Seven Year Cycle….
The point is, when a couple gets married, they are passionately engaged for a sustained period of time. They want to ask all their friends, read every review of every wedding hall, and of every DJ or band, taste every appetizer, look at a hundred thousand different dresses, etc. Then the wedding happens.
You will never see them again. Even if they get remarried, the second (or third) time around, the bloom is off the rose. The same passionate engagement is no longer operative (in most cases).
Blogging, Twitter, video blogs, and all of the social media techniques in real estate, I believe, is less about community building than it is about establishing expertise. Which can and does lead to business. But passionate, engaged community like Gary’s wine fanatics or the average Apple customer? Sorry, I’m not buying it.
But since we’re talking about establishing expertise… let us segue into…
In a way, this is the most seductive and the most dangerous of Gary’s points. He almost had me believing that I can be rich, powerful, famous and charismatic as GaryVee simply by taking advantage of social media tools to build my personal brand.
Thing is, I’m more likely to be successful at doing that than your average realestista.
Gary uses the story about how he’s going to MC some wine show in Boston, even though he hasn’t shipped a single bottle of wine to Massachusetts in ten years (due to laws). It’s the wrong story. And the wrong focus.
The real focus needs to be on the fact that (as mentioned above) one bottle of 2005 Chateau Magrez Fombrauge is pretty much the same as every other bottle of 2005 Chateau Magrez Fombrauge. Wine, no matter how rare, is still a commodity good. Even with all of the bewildering variety of wines, grapes, vintages, regions, and so on, it is possible that one could become an acknowledged expert on wine.
Gary has been reading Wine Spectator since he was 16 years old. He’s clearly passionate about wine. He has drunk more wine, and more different wines, in the last month than I have in the last five years.
In that sort of a scenario, it is possible for someone to build a personal brand in an industry space that is large enough to warrant building a personal brand. A wine expert who knows all about cabernets probably knows a thing or two about merlots and pinot noirs. Perhaps there are true specialists in the wine world, where someone could specialize only in French varietals from 1985 to 1995 made by one-eyed vintners utilizing 16th century techniques. But on the whole, someone who truly knows wine probably knows enough about (guessing) 90-plus percent of wines in the world to pass judgment, have an opinion, and be taken seriously.
That is personal brand.
In contrast, as we noted above, every single home is different and unique. Okay, maybe brand new developments being offered to the public for the very first time has identical units, but even they are located in different places (or if an apartment building, different floors, or different sides).
The very nature of a house, in its sheer physicality on a unique patch of dirt, or with a unique view, or a unique sun exposure, or whatever means that it is the single least commoditizable thing we are legally allowed to buy and sell.
Now add in the fact that nearly every single home sold by a broker is in the ‘secondary market’ — it is owned by a seller who has ostensibly lived (or otherwise used) the property for some period of time. Differences in upkeep, in interior design, in modifications made, painted walls vs. wallpaper, etc. etc. means that even two identical condo units can be completely different in value, in desirability, and so on.
Now add in the fact that the geographic “placeness” of a property means that all of the external factors of being on that lot on that street in that section of town with that school system in that county in that state come into play. Property tax rates are different from this town to that one. This street floods when it rains, while that street remains dry. This school system is excellent, while that school system is only mediocre. Regulations on transfers of real property in this country differs from regulations in that county. And the examples abound.
It is simply impossible for any one human being to be an expert on homes in the same way that Gary can be an expert on wine. Impossible.
Someone who claims to be that expert is someone who will never, ever get my business. Because he’s lying to himself, which makes him an idiot, or lying to me, which makes him a crook.
What this means is that while social media can help a realtor establish expertise, and a realtor can work on her personal branding within her specific market on which she is an expert, I have no reason whatsoever to trust what she says about a property in another state. Or county. Or town. Or in a different asset class (multi-family vs. condo vs. single family).
This is, I submit, the ultimate in Long Tail. There is only the Long Tail in real estate, and no Fat Head.
Why oh why is this of any relevance to the issue of personal branding?
Because in the Long Tail, only the aggregators make money:
There are three basic types of participants in Long Tail markets: consumers, aggregators and producers (note that it’s possible to be all three; these aren’t mutually incompatible). The main effects on each are:
- Consumers. Effect: Largely cultural. People have more choice, so individual taste increasingly satisfied even if the effect is an increasingly fragmented culture.
- Aggregators. Effect: Largely economic. It’s never been easier to assemble vast variety and create tools for organizing it, from search to recommendations. Increased variety plus increased demand for variety equals opportunity. Also note that just as one size doesn’t fit all for products, nor does it for aggregators. I think the winner-take-all examples of eBay, Amazon, iTunes and Google are a first-inning phenomena. Specialized niche aggregators (think: vertical search, such as the real estate service Zillow) are on the rise.
- Producers. Effect: Largely non-economic. I responded to a good Nick Carr post on this last year with the following: “For producers, Long Tail benefits are not primarily about direct revenues. Sure, Google Adsense on the average blog will generate risible returns, and the average band on MySpace probably won’t sell enough CDs to pay back their recording costs, much less quit their day jobs. But the ability to unitize such microcelebrity can be significant elsewhere. A blog is a great personal branding vehicle, leading to anything from job offers to consulting gigs. And most band’s MySpace pages are intended to bring fans to live shows, which are the market most bands care most about. When you look at the non-monetary economy of reputation, the Long Tail looks a lot more inviting for its inhabitants.”
Now, I know some of you are arguing that for the individual realtor, social media works as a personal branding vehicle with indirect revenues: the great personal branding leads to more referrals, assignments, and the like.
Yes, true… to an extent.
But two things fall out from that.
One, a realtor can never really be GaryVee. “Take the world,” exhorts Gary. Unfortunately, that is simply not a reality for realestistas. Ginger Wilcox may be very well known in the RE.net for her social media prowess (she even writes the blog Ginger Knows, after all). But someone looking for a house in New Jersey ain’t calling Ginger. Can Ginger, like Gary, win consulting assignments and write books and such? Sure. But those are distinctly non-realtor opportunities, quite distinct from Gary getting invited to Boston wine event.
Two, from a consumer branding standpoint, he who aggregates all of these personally branded individuals under a single consumer brand (and enforces it and grows it) is the one who will ultimately make most of the money.
Today, the drama in the real estate industry is who will emerge as that aggregator. Will it be the niche search engines like Trulia and Zillow? Or will it be the Big Brokers (including major franchises, such as Remax)? Or perhaps it may be the MLS/Realtor Associations with public-facing websites.
Because while one individual agent cannot be an expert on all homes in a large enough market segment to make real, serious money, a large enough collection of them absolutely can.
And that is a very useful thing to think about if you own a Top 100 brokerage company in 2009.
Ain’t No Business Like RE Business
In the end, I loved Gary’s presentation and speech. He’s a truly dynamic speaker. He talks with passion, with knowledge, with expertise, and with the credibility that comes only from success.
But fact is, he isn’t in real estate. He doesn’t know some of the real fundamental issues that makes this industry so absolutely unique: the non-commoditization, the Seven Year Cycle, the Longest of Long Tails. All of which conspire to make the overall thrust of his vision a very appealing, very seductive dream.
Sadly, a dream it is. And a dream it shall remain. Until the fundamental facts of this most unique of industries change.