NEW YORK — “Where do you see Zillow going in the next 10 years?”
Co-founder and executive chairman Rich Barton had plenty to say on that topic at the Inman Connect New York conference this week.
“I came to a very early Inman conference and knew very little about the real estate industry,” he said. “We just kind of listened to what the state of technology in the real estate industry was, because this was the conference to do that.
“It’s hard for me to believe that it’s 10 years later,” he noted.
“I see our role at Zillow Group as building a platform of magical technology that the players in the industry all dance on.”
The smartphone difference
A decade ago, Barton noted, smartphones — let alone mobile apps and responsive websites — weren’t a thing.
“Those of us who were lucky enough were shopping for real estate, kind of, on the internet, in a really hobbled way,” Barton recalled.
“The bulk of usage happens on smartphones now.”
“The real estate industry will be one of the very first commercial adopters of VR [virtual reality] technology,” predicted Barton — and it’s also a big area of investment for Zillow Group right now, which spends $200 million a year on research and development (R&D).
“VR is here today,” he noted. “Is it broadly adopted? No.”
“However, as we look out and we see what the first commercial applications of VR might be, we believe an immersive real estate shopping experience.”
What about agent disruptors?
“We firmly believe at Zillow Group that real estate is not a DIY category,” said Barton.
“Many other ecommerce marketplaces can be DIY — people can buy their own books and select their own movies — but the research shows, and human behavior is such, with such an incredibly big purchase, people want a coach and an advisor.
“The role of the real estate agent in the future is similar to the role of the real estate agent today: being a coach and advisor,” he concluded.
However, there will be one big difference: “The tools that agent has at her disposal are going to be magical.”
What will those magical tools include?
Barton listed a few ways that technology will help agents become more productive — including virtual co-shopping with clients to tour homes.
Customers expect immediate response, and technology will enable that, he said. “The agent of the future is the agent that is living via these digital devices and compressing time.”
Won’t that compression of time lead to fewer jobs — for everyone? Not necessarily, Barton said, noting how many workers used to be necessary to grow food for our society. It took almost the entire village.
Today, only 2 percent of people need to be involved in food growth. “Do all those other people just not have jobs?” asked Barton rhetorically. “No; they do other things now.
“Technology has been a great deliverer of information, and AI [artificial intelligence] is going to continue that trend of what the computer has started and smartphone has done — deliver more information about the real estate transaction to you.”
Sacrificing quality for convenience
However, Barton noted, it’s not unheard-of for consumers to give up some quality for convenience.
He explained how his family stopped using Sonos in favor of Echo. “It is that much more convenient to just be able to ask Alexa to do something, and even if the quality is degraded, people are going to do it,” he noted.
Smarter artificial intelligence
Alexa (and her kin) will only grow smarter, Barton opined.
He noted that right now, you have to ask Alexa for information in order to receive it. “Alexa is about to be given permission by us to speak first,” he said.
“It may be that Alexa will know when we come down into the kitchen — she’s listening to us all the time — that she’ll just start telling us stuff. And as long as the quality of what she’s telling us is high, she can keep telling us stuff.”
What about Opendoor?
“I haven’t thought much about,” said Barton when asked. “My understanding is they’re offering about 10 percent less than the house is worth for convenience.
“Professionals probably have a better idea than I do how many consumers would be willing to give up $30,000 for convenience. That seems like a narrow market to me.”
What might be important to understand about Opendoor, he added, was acknowledging the pain sellers feel going through the process — to the extent that some of them might be willing to give that amount of money up.
How to be a successful entrepreneur
“I’m a big fan of the BHAG,” Barton said — the big, hairy, audacious goal.
Bill Gates’ for Microsoft was a computer on every desk and in every home running Microsoft software. “It was an audacious and crazy, crazy idea,” noted Barton. “But they got together and thought, ‘What would have to happen to make that a reality?'”
Barton used a Wizard of Oz metaphor to talk about what entrepreneurs need to thrive:
- Brains. “We have to be smart, and we have to hire people that are smarter than us. That’s trite, but I believe it.”
- Courage. “If we’re caught holding our tail and shivering in the corner when faced with the first little danger, we are not going to make it.”
- Heart. “People around you, as you run your businesses, they react to feelings more than they react to the stuff that comes out of your mouth.”