Real Estate Agents Are Creators
Issue 39 - July 2nd, 2021
The creator economy is the future of an entirely new way to work for people in the world, and I love to keep a close eye on the industry because I personally see a lot of parallels between the “creators” and real estate agents.
What is the creator economy? It’s defined as the class of businesses built by over 50 million independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.
The focus and end goal for creators and real estate agents is completely different in scope, but they are all “CEOs” of their own small businesses and need the tools and support to perform to the best of their ability. They no longer need to rely on “record labels, booking agents, or production studios” to build their brand much like real estate agents don’t need to rely on large brokerage firm models to have the tools needed to succeed.
Real estate agents for decades have been trapped inside of legacy brokerage models (much like creators or artists needing to be affiliated with a record label) where they have traditionally been encouraged or expected to use the firm’s tools and abide by the firm’s way of doing business with everything from marketing to sales tactics etc.
As the industry evolves, the AGENT is gaining more control and autonomy over their future. The future of the residential real estate industry is the AGENT and the firm as a brand is slowly fading to the background.
Historically, agents had to be affiliated with a large, well-known firm to get access to listings, tools, and a support system. In today’s world, technology costs for best-in-class tools are super affordable, listings are available to everyone, and the AGENT is emerging as the most important person in the brokerage ecosystem. Agents have control and choice over their futures more than ever before and legacy brokerage models are slowly losing out to up and coming firms like Side, eXp, Avenue 8, and our firm Archetape.
We are in the midst of a huge revolution in the residential real estate brokerage space, and new brokerage models are forming to push forward the AGENT as the center of the ecosystem because without the agents the firms cease to exist.
Legacy brokerage firms that fail to recognize this industry evolution will fall behind or go completely out of business.
The legacy brokerage firms are hitting a point in time that Clayton Christensen would refer to as the “innovator’s dilemma”, and it will ultimately be their downfall. If you need more concrete thinking around this idea, then think back on Blockbuster Video and Netflix. Blockbuster was the clear dominant leader in the video rental space and now they are not even in business anymore because they failed to innovate to build for their “future” customer.
The Innovator's Dilemma is the decision that businesses must make between catering to their customers' current needs, or adopting new innovations and technologies which will answer their future needs.
Legacy brokerage firms know that the industry is changing but most large firms are afraid to take risks innovating that could cannibalize their current business model so it delays any sort of innovation on their end. This inflection point in a market is a huge opportunity for companies like mine and others in the space that are building the brokerage firms of the future.
The future of the residential real estate brokerage industry to me is hyper local teams and individual agents who have developed their own brand and run their entire business completely detached from a large, well-known firm. Tools and brokerage platforms are being built today to realize this vision, and the foundation and core offerings of new age brokerage platforms are being built in a way to make money and provide impeccable service and support to agents at the same time.
Newsworthy Links To Share
Real estate brokerages embrace remote-work in a post-Covid world. In a recent conference in Colorado, brokerage leaders from all over the USA discussed their post-Covid office plans, and most firms are cutting office leases and pivoting towards a more remote, cloud based approach for their agents. (HousingWire)
On Airbnb, demand for treehouses, turts, houseboats, and other unique destinations has surged in popularity as the world opens back up. Airbnb hosts offering “unique stays” — the company’s term for out-of-the-ordinary listings such as treehouses, tiny homes and private islands — have earned more than $300 million since the beginning of the coronavirus pandemic, the company announced Wednesday. (Inman)
Tomo, a highly anticipated fintech startup founded by former Zillow executives and backed by $70 million in seed funding, has launched in three markets (Dallas,Seattle, & Houston) and is catering to homebuyers and agents by providing mortgage pre-approvals in hours, guaranteeing on-time closings, and matching competing lenders’ rates. (TechCrunch)
Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, has raised “$50 million-plus” in a funding round that more than doubles its valuation to $2.5 billion. (TechCrunch)
Millenials are opting for larger apartments because they cannot buy homes. RENTcafe analyzed 92 cities and apartment floor plans in buildings currently under construction, with 36% trending toward larger apartments than what had been built in the last five years, according to data from its sister company, Yardi Matrix. Millennials are getting older, starting families and interested in larger spaces and more of a single-family home feel to their apartments, which is driving up the size of the units. And the dynamics of this supply and demand means builders are building larger units. (Dallas Business Journal)
Goldman Sachs led a $32 million investment in a startup that enables single-family landlords to acquire rental properties. Entera parses property records to help landlords, home flippers and other investors match real estate listings to their buying criteria and make instantaneous decisions on how much to bid on a given property. Its clients include Invitation Homes, the largest single-family landlord, property records show. (Bloomberg)