The Future for Business Models
Make no mistake, although the basics are the same, it will not be business as usual.
For many years, we have researched and discussed innovation, new business models and companies that push the envelope of change. Looking back, few people and companies really stand out as true innovators – those that have strived to change the existing real estate brokerage paradigm and then were able to actually do so.
Trailblazers that stand out the most as leading business model innovators over the half a century would be:
- Century 21 (1971)
- RE/MAX Intl. (1973)
- Keller Williams Realty (1983)
- EXIT Realty (1996)
- Redfin (2004)
We will remember leaders such as Dick Laughlin (introduced franchising), Dave Liniger (reshaped agent compensation) and Gary Keller (redefined broker and agent cooperation).
Clearly, more recent innovators have not yet enjoyed the benefit of time to fully mature their innovations, so we will still have to wait and see how large their impact will be. The most important elements in building a successful new business model have, of course, changed over time, but it still primarily remains focused on:
- Agent compensation
- Agent relationships
- Technology innovation
- Enhanced consumer experience
In reviewing creative new approaches that were launched during the last decade (2000 - 2010), and excluding companies we have discussed before such as Redfin, we discovered an interesting cross-section of innovators. Some are outside the box, while others offer a new twist on a current model.
Only time will tell whether or not any of these companies will turn out to be successful. It is, however, encouraging and with great anticipation that we will track the progress of innovators such as:
- Allison James
- Connect Realty
- eXp Realty
- Pedal to Properties
- Professional One
- Your Auction Division
As the economy regains momentum, the country will find itself on a different playing field. The Internet, social media and smartphones have altered the way we will serve our real estate clients. At the same time many of the basics we have been taught for decades still apply, just with a different mindset and a different set of tools.
But as every generation matures, each new generation has an idea of how we should implement the basics. At the same time, new financial oversight and regulations are changing the way we "view" and "do." Make no mistake, although the basics are the same, it will not be business as usual.
The American consumer is now and will, for some time to come, be faced with more uncertainty about the future of housing than in the pre-bubble years. This creates an ideal opportunity for the real estate industry to rethink the business model it should be using to meet the needs of the evolving home buying customer.
Out of every challenge come many possible solutions. We touched on just a few companies that are attempting to develop some of those solutions. Their challenge is without question a very complex one. They need to incorporate many existing elements while changing the process at the same time.
Furthermore, existing companies are not going to be standing still either. They will also continue to evolve, often undermining innovation, making new companies less unique and competitive.
Some of the moving pieces that brokerage companies need to consider include economic uncertainty, the collaborative and immersive nature of the Internet, the needs and desires of the emerging generation of consumers (Gen Y), the rapid advancement of technology, wireless broadband and the dramatic expansion of social networking.
Any innovative company or REALTOR® should be commended and respected for taking on the challenge and not sitting back to wait and see where the industry, the economy and the world is heading.
Stefan Swanepoel has written 19 books on business trends, real estate and social media, including his annual Swanepoel Trends Report, and is widely acknowledged as a leading expert on real estate business trends. He has been listed as "One of the Top 100 Most Influential People in Real Estate." Swanepoel has given more than 700 talks in eight countries and 42 states to more than 400,000 people.
Share This Page:
Please log in to Facebook to provide comments. Comments will not appear on your Facebook wall without your permission.