A Kodak Moment for the Real Estate Industry?

by Thomas Heimann on June 9, 2015

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Today emotions are running high within the real estate industry, ranging from disdain to outright panic in response to aggregators (Zillow/Trulia), discounters and new business models popping up, many of which are aiming to disintermediate or disrupt the current business model embraced by the real estate industry, a business model that has changed very little over the past 50 years.

And while the industry itself gave birth to the technology that supports and powers to a large extent many of those disrupters – namely IDX MLS data feeds – the industry is discounting new ideas or approaches to the real estate transaction with sentiments like ‘real estate is an emotional and complex transaction that cannot take place without agents” and “clearly those entrepreneurs have no experience working in the trenches”… and many more less polite perspectives.

This reminds me of the time I used to work in the fashion photography industry in New York City in the late 80′s, at a time when digital photography was first coming onto people’s radars – of course still decades away from what we have today. Yet, in those days the consensus amongst all of the top fashion photographers was that “digital photography will never replace film”, “you cannot match the softness and authenticity of color” … blah blah blah.

Eastman Kodak, a company that at the time was synonymous with photography and film and in actuality ‘owned the photography space’ and had actually invented digital photography technology, but they, too, discounted it as inferior and never being able to match the quality of film (or become a serious threat).

Well fast forward to today. What happened to 35 mm film? Most of the millennials today never heard of Kodak – a relic akin to the rotary phone. The company that invented digital photography filed for bankruptcy in January of 2012 and ceased to exist.

I cannot help but feel and fear that the real estate industry may – right now – have its very own Kodak moment. The technology it gave birth to (IDX) is in turn becoming the vehicle used by disrupters to create new and better business models – business models that are consumer centric, meaning based on and addressing the needs of the consumers that are doing the actual buying and selling.

Instead of being supremely arrogant in suggesting that they – the agents – know best what the consumer wants and needs, discounting any suggestion that there may be a better way ultimately in the process, those agents and brokers might be better advised to study, look for and even embrace some of these new business models. If there truly is a better way to provide better value to the consumer, how can that be embraced by the agents (as opposed to being pushed against)?

One example of a ‘new kid on the block’ is www.xome.com. Barely launched already ridiculed by many in the industry.  Very akin to the ridicule given to the first digital cameras offered in the market place – by the very creators of the underlying technology no less.

Technology and change are taking place at an exponential pace. What used to take 30, 40 or even 50 years is now compressed into 5 years (the iPad was invented 5 years ago and already has transformed entire industries).

For real estate professionals to remain relevant, let alone successful, they must embrace the changes that are coming – and champion them, become disrupters themselves, or undoubtedly they will share the fate of Kodak, and a new generation of real estate professionals / entrepreneurs will say one day soon: “Can you believe people used to buy and sell real estate like that?”.

Not too long ago you had to buy rolls of film to take 36 pictures maximum, and then pay to have the film developed, and print ordered (just to see how the picture came out).

Carpe Diem – and embrace change!

To Your Success!

Thomas Heimann, Founder & CEO
Realty Partners LLC
http://www.realty-partners.com
@thomasheimann

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