Bob or Jack - Best of Breed or Bundled Technology in Real Estate
March 5, 2018
Camp Unbundle: Best of Breed (Bob)
Camp Bundle: Jack of all trades, master of none (Jack)
Tech is a broken record. The old school thinkers and analysts rightfully say that there are only two ways to make money in tech: bundling and unbundling. For example, HBO as a standalone product is an unbundling of cable. Real estate brands aiming to be tech companies will bundle instead of going with a best of breed strategy in each category, like video for example.
There’s no need to further review Gary Keller’s recent presentation about “bolt-on technologies,” other than to say that what he is ranting against is a best of breed strategy. In other words, Keller Williams wants to be in Camp Bundle: a Jack of all trades suite that is meant to be trusted above and beyond other bundles for reasons based entirely on their history of serving agents. I see this working, but head to head against tech companies, they should plan to serve a much smaller group than their current, 175,000 agents.
The problem with bundles is that they always get unbundled. The beauty of a best of breed strategy is that you always have a video team or a CRM team that can only stay in business if they remain the best. This is the truest viability test you can have for a tech company. If a CRM suite is not the best it can be, every single day, then it will not be able to remain profitable and will die. That same CRM, when in a bundle, will just annoy the living hell out of you.
Real estate tech has never been this dynamic or loud. What we thought was huge innovation in 2006-2015 has proven to be evolutionary compared to what is happening now. Here are some bullet points for agents, teams and brokerages that might be confused about which camp to choose going forward:
The best of breed camp will need to adopt things more quickly, and invest more heavily (albeit far less than bundlers) into things that work.
The cost of getting it wrong, in any category--whether in a brand new category like 3D or commoditized categories such as CRM--will be far less for best of breed-ers than for bundlers.
Getting something right as a bundle is the easy part. Keeping it right is where bundles falter.
The cost of adding and removing best of breed solutions is far less.
The most expensive strategy, by far, is the build strategy. Worse, those that build are far less likely to remove tech that arrives at inferiority (a place that all bundles inevitably arrive to). Our babies become our babies.
Even bundles will have to “bolt on” tech. If they don’t, forget about remaining competitive.
“Not built here” is extremely problematic because copying others’ technology is not a sound strategy. Worse, it can be a risky, potentially company-ending, proposal.
Best of breed is diversification of R&D investments. It’s a strategy where many agents, teams and brokerages invest in Best of BreedCo’s research and development to save money.
I hope this post is received as a calming force amongst a lot of noise. Get rid of tech that is not serving you. If you think that tech is disrupting real estate, the simple fact is that there was “the industry” yesterday and there’s the industry today. Tech isn’t going away, but neither are the best agents, teams and brokers.
There’s a lot of fear-peddling going on, but I have never seen this amount of opportunity for great professionals with a singular focus on their customer.
Vamos. We Go. Carpe diem! Let’s Roll!