A winning combination in business today is pairing human services or human-powered enterprises with technology. It’s a race in which the online and software companies put more of their stake in the brick-and-mortar world, and vice versa. From where I sit, there’s no better fit for the technology-and-human-power combination than real estate.
Two examples are Uber and Airbnb. These companies — with a combined valuation of $54 billion — are two of the most talked-about companies in tech. Yet upon closer look, neither of these companies are tech or software companies in the traditional sense. What gives Uber and Airbnb value is the real-world component of both businesses — the people part. The human capital makes them run and keeps them growing.
What is Airbnb without the homeowners who list their places for rent or the people who respond to complaints and reports of illegal activities and rule-breaking? It’s a defunct ghost town of a website.
It would be silly to say that Airbnb and Uber are “websites” — or even software companies. At this point, you can’t even say with accuracy that Uber is a mobile app because it is so much more. Uber is a network of drivers that are connected by the Uber platform. The app is the first consumer touch point; it’s not the business itself.
The biggest opportunity for brokerages today is in marrying great technology to great people. If we’ve learned anything in the nearly 20 years since websites replaced MLS books, it’s that the people part of the overall real estate business will be aided but not eradicated.
Almost all listings are online. Many transactions are nearly paperless. Our upfront research on anything these days is via the Web. But at the end of it all, people still want other people to be involved and help when dealing with the largest transaction of their lives.
Buyers still ride around in Realtors’ cars on Sundays looking at homes. Sellers, for the most part, still meet face to face with listing agents before signing a contract.
We are and will always be a people-centric business.
Examine the biggest problems plaguing the industry right now, and they’re not technology problems — they’re people and resource problems.
For instance, despite all the whiz-bang technology for lead capture and management, half of all online leads go without response. And conversion rates still linger at 1 to 3 percent in real estate.
These are both problems better solved by a combination of people and technology — if technology could solve these problems alone, it would have done so by now.
Why are conversion rates still so abysmal in real estate? We’ve got the platforms, the lead forms and the software systems. We lack the people needed to better qualify leads and follow up.
Sure, we can add algorithms to the mix to better score leads based on what these people actually do on real estate sites (not just what they say they want). But algorithms alone can’t handle the humanness needed when calling a prospective buyer or seller to really get at the heart of what they need. Actual people do a much better job here.
We believe this people-helping-technology-helping-people marriage will continue to fuel growth and success in the online referral business and the greater real estate industry. Remember this: Nearly every housing transaction these days begins with a Web search, and ends with not just one professional, but a team of them, who help get the consumer from that first online point to unpacking in their new home.
Let’s aim for more innovation that utilizes the best of both worlds.
Scott Olsen is the chief executive officer of ReferralExchange.com.