When I was a child, sometimes I would repeat a word so often that it became just a jumble of sounds and lost all meaning.
Academics call that Semantic Satiation, but no matter what you call it, constant repetition degrades the meaning of a word, and by doing so, creates an obstacle to informed communication. Unintentionally, the real estate industry has become the target of semantic satiation, as people look for the next new thing, the magic bullet, the redesign of the industry.
Like children who hear goblins and ghosts with every noise on Halloween, in a collective anticipation of the re-invention of the real estate, we react or over-react from two different perspectives. One group, younger in the business, or vendors to the business, look at the industry and sees a broken engine, begging to be replaced. They perceive that the demands and habits of the consumer (who has little or no understanding of how the industry works) will shape the next wave of real estate businesses into something different. Easier perhaps, more transparent, simpler in every way, and of course, less expensive and more consumer friendly.
The other group knows too much. They see the industry as better than it was when they began. More efficient than the marketplace of 20 or 30 or 40 years ago. They see real estate professionals as better trained, consumers as being better served, the marketplace as more transparent, information as more available. Each one has some kernel of truth, but it is only in seeing the continuity of the industry that the progression can be seen. I have been worrying the words “disruption” and ‘innovation” ceaselessly for weeks now. I have asked others in the industry what they can think of that was truly innovative in the industry, truly disruptive, and when they analyze the big changes of the past decades, not much comes to mind. Too many things labeled innovative or disruptive are merely old business models or old tasks attached to a website and a dashboard.
So what’s going to disrupt the industry ? I don’t know, and contrary to the statements made by so many others, no one else seems to either. I do know what isn’t going to disrupt the industry though;
1. Businesses that are centered around the fees charged to the consumer – Discount , flat fee, fee for service models have all been around for decades, and no one has found a way to make them profitable when they scale. Business models that create a job for the owner instead of a duplicable scalable change in an industry aren’t disruptive, they’re just different.
2. Business models that expect the consumer to change their habits, or pay for services in advance – we have trained the consumer that they can have our services without advance payment, and asking for a check isn’t easy. Any mass re-education of the consumer is not going to happen because you want it to , in order to support your business
3. Adding a piece of software and a dashboard to automate a job that salespeople need to do. Real estate salespeople were drawing contracts in the 19th century, and the invention of the typewriter didn’t disrupt that. The invention of the electric typewriter, including those that stored phrases and clauses, didn’t disrupt that, and neither has the use of form specific software. These aren’t revolutions they are evolutions.
4. Advertising platforms aren’t disrupting the industry. At least not the real estate industry, though the internet did disrupt the publishing industry, Though we spend a huge amount of time talking about Zillow, Trulia, Realtor.com and other online portals, they are no different than the advertisement for a brothel in ancient Ephesus that includes a heart, a cross, a woman’s head, a foot and cash; which was translated as ‘turn left at the cross roads where you can buy a woman’s love’. Advertising is older than the real estate business, and these are merely the new iterations of them. Though the sites are slick, and the user interfaces are neat, they are still advertising platforms. They can employ economists, meet with politicians to position themselves in the consumer’s mind as a trusted resource, create webinars and training and send speakers to industry events. but its all about helping them to sell more advertising. Its the same old song, just with new instruments. They perform a needed function for the industry, and they have built a place for themselves. but they were innovative, not disruptive.
Youth does not equal innovation or disruption, anymore than age necessarily equals wisdom, and we harm ourselves and our industry when we forget that. But the tendency to believe that they do, and some confusion about the difference between innovation and disruption leads to that semantic saturation I mentioned earlier as we laud the efforts of new businesses to carve out their space in and around the industry.
Next up – Disruption and Diversions – a synopsis of how the industry has been disrupted in the past 4 decades, and how it wasn’t.