A couple of months ago, I took a taxi for the first time in years. I was at an airport where the Uber pickup was a long walk away, while the taxi stand was right there at the curb where one exits the terminal. I figured, what the hell – the cab is right here.
As I’m getting in, I notice that the cab has all kinds of ads all over the side, rear, and inside the passenger area promoting an app. Apparently, I can hail a cab using this app, use it to pay my fare, rate my ride, see a map… in short pretty much everything that Uber app does.
I do not have this app on my phone. I still have the Uber app on it. Why?
The cab smelled. I can’t identify precisely what the odor was, nor did I want to. But it wasn’t ylang ylang. The driver barely spoke English, and maybe he was a really nice guy, but he came off as surly and unfriendly. There was no small bottle of water in the back seat. No phone charger cable.
The taxicab app might have been awesome. Its features might have kicked Uber’s ass and taken names. Maybe it had advanced AI that predicted where I wanted to go without my having to tell the driver. Maybe it would have educated me on important global topics while I rode. I’ll never know, because I had such a terrible experience that the tech did not interest me in the least.
So, here’s the question: Did the taxicab company build that app for me? Or for the driver?
Whose experience was the taxi company who developed that app concerned with? Who do they love: me or the driver?
Technology is a Tool
I just spent a day in one of the best meetings I’ve had in years with a gentleman who is a real estate tech entrepreneur. He comes out of the consumer internet space, from a company whose name you have heard of.
One thing he mentioned was how in his previous company, every meeting pretty much began and ended with, “What will the consumer experience be?” It could be the most technology-driven meeting with engineers and product managers talking about data transport formats; but the team (supposedly) never lost focus on consumer, consumer, consumer. The greatest tech advance in the world did not matter one bit if it did not improve the consumer’s experience.
Maybe because they worked for a technology company, they knew the limits of technology. You can make the checkout process as easy and as simple as possible, and funny and delightful… but if the product arrives late, arrives damaged, or is the wrong order… the technology doesn’t matter in the least to the consumer’s experience.
He wanted to try and bring that kind of focus to real estate technology.
Maybe because I spent a bunch of time and energy writing about Gary Keller recently, and had a rather large cohort of people deliberately misunderstand me and pile on me for being a ‘hater’, or maybe because of all kinds of opinion pieces “defending” Gary Keller, I immediately thought of that whole line of reasoning from one of the visionary leaders of the industry.
Tech-Enabled Agent vs. Agent-Enabled Tech: Entirely Missing the Goddamn Point
I have said on the record that Gary Keller has identified the problem as the struggle between tech-enabled agent vs agent-enabled tech. I took issue with the solution he proposed: becoming a technology company, some 10 years too late and a few billion dollars short, but the core challenge of remaining “tech-enabled agent” instead of transforming to “agent-enabled tech” remains valid.
Thing is, because I’ve been thinking long and hard about the iBuyer space (coming soon to a Red Dot Report near you!) I realized that we’re all—myself included—missing the point.
The point is not the relationship of the tech to the agent, but the consumer experience with the real estate transaction. And if we’re honest about it for a minute, that experience sucks donkey balls. No one who has ever bought or sold a home is thinking, “Boy, that was just awesome! I can’t wait to do it AGAIN!”
Some of the suckitude is because of the real estate industry. It sucks when your listing agent won’t return your three phone calls asking for an update. It feels bad if you feel your buyer agent is pushing you to choose a house because she
wants needs a commission check. And the industry is responsible for that suckage.
Most of the suckitude, however, is because of the dysfunctional codependent relationship between Big Government and Big Finance. Your lender wants to probe Uranus with a high-powered radio telescope, financially speaking? That sucks, but the industry isn’t responsible for that. It’s painful when the local, state and federal governments want you to sign two hundred pages of legalese in triplicate. None of those things are the industry’s responsibility, but we should at least acknowledge and understand the pain and think about how we might decrease the suck.
As the KWRI response shows, however, the focus is on the agent experience, on the agent’s business, on the agent commission, rather than on consumer’s experience.
Take a look at the transcript from the Gary Keller and Brad Inman showdown:
Brad Inman: Here we got a question. At what point do you care about the consumer experience versus the agent experience?
Gary Keller: Well–
Brad Inman: Or do you leave that to the agent?
Gary Keller: Well, no I care about the agent. I care about the agent’s consumer experience.
Brad Inman: And you feel like your technology enabling the agent to create a better consumer experience, or do you actually?
Gary Keller: Yeah, that’s the whole point.
No, that’s not the whole point, not any more than the taxicab app’s whole point is about improving my experience. The whole point is to fight off Uber (whose whole point is to create a better consumer experience). It did not occur to the taxi company that perhaps they need to look at the totality of the consumer experience; they just threw out an app, because Uber is an app. It is not.
Similarly, if brokers started ruthlessly firing every single agent who provides a bad consumer service experience, the whole point of that would be to create a better consumer experience. If real estate people started obsessing about what’s broken, what’s less than optimal, what’s problematic in the overall consumer experience with buying or selling a house, maybe they can arrive at something the point of which is to create a better consumer experience.
If you start from the premise of the agent’s experience because “the agent is my customer” then you’re screwed.
Limits of Technology
When technology is built for brokers and agents, it’s the taxicab company building an app to help taxi drivers get more fares. Technology can be magical, but it can’t work miracles. There are real limits to technology. The taxicab app can’t clean the cab. It can’t make drivers be friendly.
No app can make agents give a shit about the consumer. The best CRM system in the world isn’t going to make an agent ethical. No AI can replace a listing agent having coffee with you to give you an update on what’s going on. Protect ya data all you want, but how does that affect the client whose house didn’t appraise?
In theory, the one thing data and AI can do is to help agents do the right thing more efficiently. Agents who don’t know a market and are too lazy or incompetent to do a thorough market analysis can use an AI system connected to big data to produce a far better pricing report. But if an agent can push a button to produce the magic report, so can the consumer. Paying 3% to someone to push a button seems like a rather extravagant expense to me, but hey, see how that works out for consumer experience.
Here are a few things no consumer anywhere has ever said:
- “You know, I really hate talking to my agent—if you could provide me an AI that I could talk to instead, that’d be great.”
- “My agent likes to call me to discuss new homes that have come on the market that might meet my needs, but what I really want is an automated impersonal email from a computer system. Can you make that happen please?”
- “The thing I hate the most about selling a house is all the data I can get on the Internet at my fingertips. Knowing what homes near me are listed or sold for is a total drag. Is there some way you can force me to contact an agent who will put me on an AI-powered marketing system instead?”
Gary is correct that agent-enabled tech companies use agents because they have to. But in part, that’s because those companies are obsessed with the totality of the consumer experience. If an agent helps to provide great service and improves the overall experience, they’ll use agents. If removing the agent would provide a better totality of consumer experience, you bet your ass they’ll remove the agent—just like Uber would remove the driver if that would lead to a better overall consumer experience.
That tech companies like Zillow, Redfin, Opendoor, and others continue to have agents in the loop means that they recognize the limits of technology. The real estate transaction is complicated, expensive, and stressful. They recognize that having the (right) agent in the mix improves the totality of the consumer experience.
Just like advanced AI technology, data mining out the ass, big and bigger data, the agent is a tool through which these companies try to improve the overall consumer experience. If providing a pink bunny with every purchase would improve the overall consumer experience without making them go bankrupt, I’m convinced that the tech companies would find a way to do just that.
Shouldn’t brokerages and real estate companies and agents learn something from that example?
The Lion Over the Hill is Always and Forever the Consumer
We in the real estate industry are so concerned with the next threat, the next Lion coming over the hill. It’s Microsoft! No, it’s Google! Wait, it’s Zillow! Oh, today’s it Redfin and Opendoor. It’s those nasty discounters!
It’s as if we’ve all forgotten that the lion over the hill has always been, is today, and forever will be the consumer. Once in a while, that lion has to roar to remind us jackals who’s who. The recording industry thought it was the lion against the jackal of MP3; the consumer reminded them who’s who. The hotels thought they were the lion, and they had awesome technology to boot to compete against AirBnB; the consumer reminded them what’s what. Microsoft itself thought it was the lion, with its control over the operating system and software, and needed to put the jackals of Dotcom companies in their places; the consumer roared. When Amazon, Google, Facebook, and whoever get complacent and forget their place, the lion over the hill will remind them of the laws of the marketplace jungle.
It’s inspirational to some that Gary Keller is “standing with the agent” and protecting them from the jackals of agent-enabled tech companies. I understand. I sympathize. But the whole affair is missing the point. In the linked article above, Adam Hergenrother writes:
Gary Keller has put his agent partners first by building a platform that will allow each individual agent to be their own Netflix in their individual markets.
As we move into this next phase of the real estate industry (get ready, it’s coming!), agents get to choose the partners they’ll bet their careers on. I choose KW because it has proven time and time again that it deeply cares more about me and my business.
Netflix itself doesn’t care about the Netflix software, except to the extent that it provides a better consumer experience. Netflix was mailing out DVDs long before it built any software, because that was a better experience than driving down to Blockbuster. Netflix built software because streaming is a better consumer experience than messing around with DVDs. I’m sure they regretted having to lay off hundreds of mailroom workers, but the whole point of Netflix was not to provide rewarding careers for DVD shipping workers. If Netflix could provide a better consumer experience profitably putting on live puppet shows in your living room, Netflix would figure out a way to do just that and ditch their software tomorrow. (Or else, Netflix too would go the way of buggy whip manufacturers: the consumer is the lion.)
The next phase of the real estate industry turns out to be the same phase it was yesterday: delivering consumer experience. Is technology a key component of that? Of course it is. But technology is not the end, but the means to an end. The question then is, “What is the end goal?” Adam Hergenrother, Gary Keller, and most of the real estate industry appears to believe that the end goal is the agent’s paycheck and career. KW of course, but NAR is now the National Association FOR Realtors and MLS after MLS have “Help our members be successful!” in their mission statements. These days, even Zillow is all about keeping the agent at the center of the transaction.
It might do all of us a ton of good to recognize that the end goal is not the careers of real estate agents. The end goal is to deliver the best overall consumer experience possible at the highest profit margins possible. Everything is a tool to deliver that experience… including technology, data, and the paycheck and careers of
taxicab drivers real estate agents.
Who do you love?