Editor’s note: The following excerpt written by Inman News founder and publisher Bradley Inman originally appeared on the Inman News Blog, an interactive forum for real estate news. Click here to comment on this post and join the discussion.

Small is better

When we (myself and a group of Microsoft employees) designed Microsoft’s HomeAdvisor (online real estate) in the mid-1990s, the plan was to become the end-to-end real estate solution, emulating the entire offline real estate process. We had a plan for home listings, for mapping listings, a choose-a-lender platform much like LendingTree’s, property records and comps, a vast decision-support and image library, questions and answers, etc.

The motto was “Do it all, do it big.” We weren’t the only ones attacking the problem by trying to conquer the world.

Indeed, many Internet companies had the same ambitions in other verticals. The hope for the Web was so boundless that its capabilities were overestimated. In the end, the companies that succeeded took one sliver of the process and did it well.

Today, successful companies are building on that idea: start small and build. Begin with a map and some property listings, and then add this or that. Offer a home-valuation tool, and then add this or that. Introduce a blog, and then add another blogger and another.

Even Google enters the category by merely encouraging brokers to buy AdWords and to add some listings to Google Base — no grand scheme, no change-the-world ambitions.

This trend has several explanations:

1. Rocking the boat did not yield big dividends; so new players downplay their plans.

2. Listings are the Holy Grail so if you want them act meek.

3. The real estate market and the process are so vast and complex that each and every part offers an opportunity for innovation.

4. Big ideas tend to involve new business models but none in the last 12 years have altered the basic real estate business model, which works like this: Home sellers hire an agent to sell their homes for a commission, entering into a cooperating agreement with agents who are helping buyers, promising to compensate the agent who brings the right buyer from the commission proceeds paid by the seller. This cooperation also creates a home listing, spawning the demand.

The Web has not improved on this mousetrap; it has only worked around the edges, giving consumers quicker access to homes and a better understanding of value and what they can afford. Thanks to the Web, agents spend less time helping buyers find a home but must spend more money online finding new customers. Online companies who have focused on these incremental enhancements have created the most economic value.

I am always keenly interested in the entrepreneur who has a grand scheme to shake down the house. I listen and I encourage, but I also prepare and forewarn.

–Bradley Inman

Click here to join the discussion or comment on this post.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription