[NOTE: Some of the early comments focused on Inman’s reporting, and my reliance on that as some kind of a flaw. I have now watched the entire speech on video. I stand by my analysis in this post. If there is a flaw, please feel free to point it out, but don’t have it be because I wasn’t present at the speech. It’s all on video, and I’ve heard everything Josh and Gary have said. If anything, Inman was bland and downplayed the coverage.]
It’s been a busy few days, and not likely to get any less busy for the foreseeable future, but… I have to talk about this:
Real estate franchisor Keller Williams debuted an artificial intelligence-based virtual assistant and referrals platform today, announcing to the world it has every intention of thriving in a changing industry.
“We are a technology company. No. 1 that means we build the technology. No. 2 that means we hire the technologists …. We are not a real estate company anymore,” Keller Williams co-founder Gary Keller declared today at Keller Williams Family Reunion in Anaheim, California.
Obviously, Gary Keller is a freakin’ genius with a track record of success longer than my leg. Actually, since I’m not that tall, longer than James Dwiggins’s leg. Not everything he’s tried has turned to gold, but he’s succeeded more often than not. I have long admired Keller Williams on a lot of different levels, and I’m willing to concede that Gary and Co. are brilliant businesspeople.
So this announcement, and some of the language that came out of Anaheim during KW Family Reunion, is… well… confounding. I’m completely confused. What the hell is KW doing?
Either KW has decided that a fast glorious suicide is preferable to slow decline and irrelevance, or KW has decided that staking its reputation on a giant lie is good for its brand, or there’s something else going on that I just can’t figure out.
Let me explain.
Buzzwords Do Not a Product Make
First of all, I’m relying heavily on Inman’s reporting from the event here. So if I get something wrong, or missed something, well, blame me for not being at the speech and then blame Inman for being there and misreporting something.
[EDIT: I have the BEST readers. See below at end of article for links to the speech.]
But immediately after the “we’re not a real estate company anymore” the Inman article goes into a long deal about Kelle, KW’s now “Artificial Intelligence” app. Here’s the promo video on Kelle:
That’s not Artificial Intelligence. That’s a voice interface to dumb search, much like Apple’s Siri, which is about as “intelligent” as belly navel fuzz, or Alexa which is scary in that it collects everything you’re saying in your house but funny as hell in how idiotic she is.
We’re a pretty long way from actual AI, even rudimentary ones. And buzzwords do not a product make.
But that’s not that important, since everybody does it. Remember that we work in an industry where lighted yard signs are billed as game changers.
What is important is….
What the Hell?
From the Inman article, it looks as if there are two people talking here. One is Josh Team, the Chief Innovation Officer, and the other is Gary Keller. But here’s the extended excerpt:
For KW, that means no longer dealing with what it called “bolt-on” technology. “Bolt-on technology is anytime you use another company’s technology product that you didn’t build and own,” Team said onstage.
Bolt-on tech means being vulnerable to another company’s priorities and updates, according to Keller. Those companies also get to keep the valuable data agents generate, he noted. He pointed to the largest tech companies in the country: Apple, Microsoft, Google, Facebook, Amazon. “These are data insight companies built on your data, which you give to them willingly. That’s the crazy part,” Keller said.
“You have singlehandedly created the most valuable real estate company in the country called Zillow. They don’t create their own content,” Keller added. “It’s your data. [Real estate portals are] just using money and technology to enhance the experience so everyone wants to go there.” [Emphasis mine]
I know Gary threw out the “Z-word” as red meat to the crowd, but did he really mean to bring Apple, Microsoft, Google, Facebook and Amazon into the mix?
What exactly happens if someone from Google were paying attention to this, and decides, “You know what? KW is a competitor of ours now. We should treat them accordingly.” How fast does KW go kaput if Google decides to delist all KW-related websites and links? I mean, sure, KW will go out in a blaze of glory as the little company that defied the giants, but go out it will and that right quick.
Apple? Microsoft? Is Keller Williams launching a laptop division I didn’t know about? A productivity suite? An operating system? Does KW make cellphones?
Are KW agents going to stop using Facebook going forward, since God only knows the amount of data that Facebook collects on “their data” which they give them willingly?
Oh, no, no, Team and Gary didn’t mean those tech companies. Surely not. True, they all make technology that KW did not build and does not own, but they didn’t mean laptops, the iPhone, the Pixel2, Amazon, Amazon Web Services, Gmail, Google Apps, Dropbox, or copy machines. That would be ridiculous, even though Gary Keller mentioned several of them by name.
Surely KW meant only Zillow and the other “bolt-on” real estate tech companies.
Uh, I Guess That Makes Sense? No, Not Really
I don’t understand that move either, though.
For example, Josh Team picks on Commissions, Inc. because it’s now owned by Fidelity National, which partially owns Pacific Union, and says:
“That basically means any Realtor that is using Commissions Inc. is giving their data to a company that’s competing with them if you’re on the West Coast,” Team said.
So… again, what happens if Fidelity National takes them at their word and decides that they ought not to work with KW agents, because you know, KW is a technology company that is competing with them? There are parts of the country where not having access to FNF companies could be disastrous for one’s real estate business, you know.
Or even the hated and feared Zillow, usually the unspoken subtext of the “it’s your data!” talk, but in this case, spoken out loud and lumped in with Google and Apple and Amazon. (If that’s talking down your competitors, maybe KW execs need a refresher course on what “talking down” means… but I digress.)
Quite a few KW agents, particularly those who have large profitable teams, leverage Zillow Premier Agent leads for 5X, 8X, 10X ROI and then some. Sure they bitch about Zillow “selling their leads back to them” but they’re happily buying leads on other agent listings on a wide variety of zip codes and making a fortune off those leads.
Is KW begging Zillow to cut off those leads to KW agents and agent teams? To what end? How in the world does that benefit their agents and teams currently cashing checks that Zillow leads brought in the door?
I’m reminded of Don Michael Corleone telling Tom Hagen, “You see, all our people are businessmen. Their loyalty is based on that.” Maybe KW wants to force a showdown to see where their people’s loyalties lie. To what end, I’m not sure, but I’m having trouble explaining this move otherwise.
Even the little guys who KW feels like it can push around and bully, the Boomtowns of the world, the Market Leaders of the world (who is a big part of the KW eEdge platform), the Imprevs, the various other CRM vendors like Contactually, the transaction management vendors, agent website vendors like Real Estate Webmasters or Placester or whoever, even email marketing vendors… all of those guys now have to wake up to the reality that their relationship with KW has a definite time limit and it isn’t a friendly partnership.
No, they have now been told that KW considers them parasites who are dangerous to the agent:
And so, Josh Team wants to make sure that KW is the winner in the upcoming battle over technology:
“And so everything we’re doing, from all of our initiatives, Labs, everyone pooling their money together and creating that fund, growing our own tech budget by … tens of millions of dollars annually. All of that is around a singular purpose, which is to make sure we are the winner and that Keller Williams creates the solution that allows the tech-enabled agent to win and outperform the technology platforms that want to disintermediate the agent.”
If you are a technology vendor today, and you read that, here’s what crosses your mind (or ought to, immediately): “Hmm, maybe I need to work with my other clients like Re/Max and Realogy and HomeServices to make sure that they are the winner, because if KW is the winner, I don’t have a business anymore. Those guys know they’re real estate brokerages and not technology companies.”
How exactly is it good for business to create a whole legion of competitors overnight, all of whom are now incentivized to make sure you are the loser in whatever upcoming war by helping your actual brokerage competitors kick your ass as much as possible?
Finally… Aren’t Agents 1099 Independent Contractors in KW World?
And then, the article ends with this bizarre passage:
Keller vowed to adhere to a data pledge that would differentiate KW from other companies’ data practices:
“We will always respect your data as your business and we will always allow you to take your database with you.”
This means: “Your data is your business, and we will never hold your data or your business hostage. If you leave, you can take your data with you and we will not keep a copy,” Team told Inman.
Uh, that’s good, but given that Keller Williams just spent a bunch of time talking about how it isn’t safe to give your data to a bolt-on technology company who will use that data to create wealth for itself… why wouldn’t a real estate agent apply that same logic to his relationship with Keller Williams itself?
After all, Keller Williams is no longer a real estate company but a technology company, which wants you to use technology that you have not built and do not own… like Kelle and KW Connect and KW eEdge and Keller Cloud and whatever else it will be building and owning with the tens of millions in additional tech funding?
It isn’t as if KW agents are employees of Keller Williams, who receive a paycheck from the company. In fact, they pay Keller Williams out of their commission checks, don’t they? Aren’t they 1099 independent contractors, all of whom are supposed to be running their own businesses?
“We will always allow you to take your database with you” sounds good, until you think about why you should give them your database in the first place unless your last name is Keller or Williams, and you own equity stakes in KW. After all, isn’t KW going to use your data to create insights that your competitors — who are literally sitting in the same office as you are — will use to compete for listings, compete for buyers, compete for business?
Goose, Gander… you know the deal.
None of this makes any sense.
And Then, There’s This…
That’s just tech vendors. You know what else Keller Williams did not build and does not own where KW agents constantly input their data to be compiled and used to create insight that benefits competitors?
The Multiple Listing Service.
The single biggest “bolt-on” technology that the agent uses day in and day out is the MLS. KW just told all of its 175K or so agents that it isn’t safe to put their data into a third party bolt-on technology that they didn’t build and do not own.
I mean, if they’re going to be dissing Commissions, Inc. because Fidelity National is the corporate parent, which means using CINC = giving your data to Pacific Union, what the hell do they think of the MLS, which is designed to give your data to your competitors?
And if I’m one of KW’s partners in Project Upstream, I now have reason to question what KW’s endgame is in our little partnership, so it isn’t as if the Upstream folks ought to be cheering Gary on here.
I mean, look at this passage here, quoting Josh Team:
“We see every contract that’s written. We see every one that’s accepted. We see every one that goes back and forth negotiated. We’re seeing all of this information, so we want the ability to go back and say, ‘Hey agent, on this contract that you’re writing, did you know that contracts that have escrow of $3,400 or more in this area right now in this moment in time in the last 30 days, have a 17 percent greater chance of being accepted?’” Team said.
Every contract that’s written? Or every KW contract that’s written? Because if it’s the former, the MLS and the other brokers who contribute to it have to start wondering just how KW got the data on every contract written in a marketplace. Is that covered under the MLS rules?
If it’s the latter, then just how accurate could the KW One Database to Rule Them All be? KW doesn’t have even 50% market share in any market in the United States as far as I know.
So if I’m a broker, I know I’m making a phone call to my MLS asking if KW gets contract and offer data from the MLS. Then I’m making phone calls to all of my transaction management vendors to see if KW is getting that data from them. Keller Williams, whose agents compete with mine for listings and buyers every single day, wants the Keller Cloud to be this one source platform with all of the data to give their people an advantage over mine? Fine, but KW can do that without my data.
Plus… yes, the MLS as a whole tends to be go-along-to-get-along everybody-cooperate type of an organization who would rather keep their competitors afloat instead of going after their customers… but even the MLS community has started to think about competition and consolidation over My Little Pony Data Sharing. What motivates the MLS to keep thinking of KW — no longer a real estate company, but a technology company — as a part of the family instead of a real threat on the horizon… and treat KW accordingly?
Of course, maybe Team and Keller didn’t mean the MLS by “bolt-on” technology. Just like they didn’t mean Google and Facebook and Apple. And they didn’t mean Dotloop, which is the transaction management platform in eEdge. And they didn’t mean Market Leader, which is the CRM in eEdge. And they didn’t mean your company, Mr. Tech Company CEO currently providing products and services to KW agents; they meant those other guys who aren’t safe for agents to use.
I’m sure that will be reassuring and compelling to tech company entrepreneurs everywhere. Or not!
Relax, We Didn’t Mean That; It Was Just a Pep Rally
Speaking of “that’s not what we really meant….”
Maybe the whole thing was just an elaborate fire-up-the-crowd pep rally kind of a deal. I mean, social media afterwards was full of KW agents talking about how great they are, how wonderful their company is, etc.
Maybe behind the scenes, all of KW’s technology partners (which includes Zillow, by the way, whose Dotloop platform is a big piece of KW’s tech puzzle) have been privately reassured.
“Hey, so Josh and Gary are going to get up and do this big fiery speech but don’t worry! Nothing changes between us. You understand it’s just a… whatchamacallit… a rhetorical device to fire up the crowd, okay? We don’t really mean what it sounds like we mean, so relax.”
That reminds me a lot of politicians who run campaigns railing against corporate greed while taking a trainload of cash from Wall Street. Or politicians doing the fire and brimstone speech talking about REPEAL OBAMACARE OMG!!!! until they win and get into power and do precisely zilch. It’s a lot of knowing winks and nods and “You know, we have to play to our base!” game that goes on.
Except this was billed as a three-hour long “vision” speech, the centerpiece of the convention. If that’s based on a wink and a nod… sheesh… you have to wonder what else could be based on a wink and a nod, don’t you? Trust is a strong bond, but it’s a fragile thing easily lost.
And why in the world would you want to emulate a politician, of all things?
So either KW meant it, or they were pulling the wool over their people’s eyes. Neither one makes much sense at all. Down one path, KW alienates just about every company in real estate, including all of their most important current technology partners. Down the other path, KW risks its credibility… for what? What’s the benefit here? What is the gain that justifies taking that risk?
I don’t understand it. I really don’t.
Do You Understand This?
To be fair, it’s not important that I don’t understand it. Who the hell am I, after all?
It is important that KW brokers and agents understand it. So if you’re one of those, please enlighten me in the comments. What’s that all about?
Because from where I stand right now, the strategy makes very little sense. Not when KW could have just as easily said, “We’re going to work with our friends and partners to create the best agent-centered technology there is to make sure tech is adding value to you, not the other way around.” Then bring Spencer out on stage to talk about how wonderful KW is, how Zillow and Dotloop are committed to making sure that technology aids the agent and not the other way around, and making the pledge about “your database” and all that jazz.
Hugs all around, kum-bah-ya moment, everybody wins.
Instead, KW chooses to alienate everybody, or in the alternative, risk its word on a false promise with compromises worked out in advance behind the scenes. Neither makes any sense to me as a strategist. But hey, Gary’s net worth dwarfs mine, so I’ll concede that maybe I just don’t get it.
If you do, kindly explain it to me. With small words. Thanks.
UPDATE: A reader, who wishes to remain anonymous, sent along these links to the actual speech/presentation by Gary Keller, Josh Team, and others at Family Reunion 2018. It looks like Lori Ballen took the video on a cellphone, and then posted to YouTube in five parts. I will commence watching them now. I urge you to do the same, so we’re not relying on Inman’s reporting alone.
Part 1: https://www.youtube.com/watch?v=_g4UXPAEXPQ
Part 2: https://www.youtube.com/watch?v=upvbiI5I3_4
Part 3: https://www.youtube.com/watch?v=0QXXaFIQuGw
Part 4: https://www.youtube.com/watch?v=jhsf75nHD5g
Part 5: https://www.youtube.com/watch?v=NOyVMuAP0do
[UPDATE, part 2: Well, within 30 minutes of my posting these links, the videos have been pulled off of YouTube. Interesting.]
[UPDATE, part 3: Lori Ballen’s videos have been removed by the user. I do not know what happened, and whether pressure was brought to bear. If so, then I’d like to experience some of that pressure myself so I can see what that looks like. So, you can find the videos on my channel.]