[Rob: I’d like to welcome Zane Burnett to the Notorious ROB family. I thought this post of his from LinkedIn was so good, and knowing Zane, felt that you all would benefit from his perspective on brokerage and technology issues. I understand we need a rap name for Zane soon, and he’ll be taking suggestions in the comments below. Welcome!]
The term “gig economy”, as cliché and overused as it may have become, is a driving and defining social force whose impact cannot be ignored.
A Gallup poll conducted last year estimates “that 29% of all workers in the U.S. have an alternate work arrangement as their primary job. This includes a quarter of all full time workers (24%) and half of all part-time workers (49%). Including multiple job holders, 36% have a gig work arrangement in some capacity.” Further, Intuit CEO Brad Smith is on record as estimating that the total amount of workers classified as being part of the gig economy are “expected to be [at] 43% by the year 2020.” To clarify, a gig-worker is defined as anyone who finds employment- whether full or part time- as a freelancer or independent contractor that receives compensation in the way of a 1099. Sound familiar?
I spend a lot of time with independent real estate brokerages, and technology seems to be a consistent pain point. They see the proverbial walls, in the forms of Compass, KW, eXp, and Redfin closing in from around them and wonder what they can do to survive when pitted against companies that not only possess the benefit of having been formed in the digital age, but the accompanying resources to continuously develop their organizations in the way of tools, acquisitions, and marketing.
Sometimes I’ll hear the harkened cry of “going back to the basics” come from the corner of a meeting room, and all of the seasoned veterans will emphatically profess the value of relationship building and door-knockers while any agent who even flimsily falls into the category of Millennial wearily doodles on whatever piece of scrap paper is available until the fervor passes. Relationship-building and brand awareness aren’t processes in the formula that these newer companies have sacrificed for the sake of capital expenditure and technology; to believe so is to inadvertently acknowledge that those very qualities, fundamental to the success of any salesperson throughout the history of salespeople, are the only characteristics you possess as a newer era of better equipped brokerages passes you by.
While many established brokerages are acquiescing to the increased compensation demands of producing agents (further diluting an already thin margin), providing a fragmented array of tech tools to supplement their value proposition (further diluting an already thin margin), or coming up with creative initiatives in an effort to plant the brand flag on a hilltop overlooking their steadfastly loyal agents (further diluting an already thin margin), the competition has done something that many established firms either can’t or won’t do: embrace the idea of Brokerage as a Service (BaaS).
It’s easy to dismissively attribute the success of market newcomers like Compass to venture capital. Undoubtedly, it is partially responsible. However, where they ultimately focus that capital stands in stark contrast to where many independent and small franchise brokerages are spending theirs. Compass, Keller Williams, and eXp Realty all have the same fundamental operating structure as everyone else: licensed independent contractors list and sell homes for a commission and split that commission with the brokerage. We’ve been so distracted by fancy new signs, declarations of shifting from a real estate company into a tech company, or virtual meeting rooms with quirky avatars that we’ve failed to see where these organizations are truly disrupting: they are creating platforms from which today’s agent can conduct their business successfully, seamlessly, and independent of physical location.
Brokerage is a Platform
I have a friend who makes a living selling handmade children’s clothing online; she has her choice between Amazon, Etsy, and eBay. Each of these are platforms in direct competition with one another, vying for the business of independent contractors who have goods for sale. The dilemma isn’t much different for today’s real estate agents: they know that the main value a brokerage can provide is a platform that they can plug their business into.
I was once standing in a room when Robert Reffkin, CEO of Compass, said, “[E]verything we do comes from our agents. There’s nothing that we’ve done that hasn’t come from our agents. I actually think this industry works perfectly, it’s just that the ideas are everywhere around us and not in one place… the role that I hope we can play is to bring all of those ideas to action. I just want to make agents happy. There is no source of happiness for me if you’re not happy.” He further went on, the following day, to paint a picture of “…a platform where all agents can easily conduct all of their business in one place without ever having to leave.”
When Gary Keller famously (or infamously) announced that Keller Williams was transforming into a “tech company”, many scoffed at the idea and went on about their day. Expounding upon this statement almost a year later, he went on to say, “The race was to build a platform. The race was to get to the platform and beginning to offer unique experiences…”
No matter where you look, the formula for success and disruption within this industry today remains the same: superb storytelling combined with a seamless platform that works wins every time.
The Gig Economy Brokerage
What local brokerages lack in the way of resources from the bigger companies they can make up for with brand longevity and community integration. Stop looking for the next tech bell and whistle that you feel as though may differentiate you from the pack because, ultimately the chances that very few people use it are high. Instead, focus your attention on two things: (1) how well am I telling the story of my brand? and (2) how easy is it for an agent to move from one brokerage to mine and conduct business the very next day?
Because, at the end of the day, today’s agent isn’t looking for a place to simply hang their license. There is little value in a brokerage by virtue of being a brokerage; today’s agent is looking for a platform. They care less about your annual kickoff event, the tenure of your managers, or the fact that your website can be translated into 12 different languages than they do about their ability to plug their value into a system that actually works without having to switch between a dozen different logins. Make them feel good by personalizing their experience and by elevating your brand (old headshots and corny bus stop ads aren’t a joke anymore; it’s simply bad business). Mold your brokerage to fit today’s gig economy so that today’s gig workers will fit your brokerage.
There’s a story, often referred to as The Phantom Ship Myth, that goes something like this: when Christopher Columbus first came to the New World, the indigenous people were oblivious to the alien ships that were anchoring on their shores. Their limited perception and scope of the world, the theory argues, made it so that their brains were incapable of interpreting what stood before them. As a result, the ships were literally invisible. While this theory has been largely debunked as pseudoscience, I find it an apt example of what goes on in a lot of today’s markets.
Don’t waste your time clamoring for the next “big thing” in tech that’s going to save your agent count; the model of Brokerage as a Service is here, and its anchors have been released.