I was on the phone the other day with the President, EVP, Corporate Counsel and Chief Marketing Officer of a well-known luxury real estate brand. These corporate types were jockeying around the familiar mantra of why real estate could not be bought and sold online - especially not at "auction."
The President of the company went so far as to say that the Realestock Auctions Model "isn't really an Auction - a true auction can only happen off-line." Quite a statement! Watch out e-Bay - it's really not going to work!
This conversation gave me a serious case of déjà-vu. It was reminiscent of the now extinct defenders of the traditional way of doing things, for example, the stock market retailer when buying and selling stock required a retail broker (enter e-Trade - retail agents history); or how about travel agency brands and agents (I can't remember one that's not online - can anyone remember having to go through a travel agent to buy an airline ticket?); and who can forget the bank teller (those ATM machines will never stick!)?
I felt like I was listening to the famous quote by Charles Duell who wanted to close the patent office in 1899:
"Everything that can be invented has been invented."
The President of this world-famous brand said something to me that made it very clear that the way things are, are on their way out: "...that is very disruptive to our business model, Tim". Uh, Hello?! That's the point isn't it? How technology and access to information and transactions online changes things - for the better!
Buying books or stocks online, finding a phone number on YellowPages.com, GPS's - technology makes life and commerce in particular more easy and efficient the more sophisticated it gets.
The other day my Son and a group of friends went to a themed benefit party at a local pub - the theme was to come as an Endangered Species. They all wore T-Shirts of GM Brand Automobiles. What a brilliant statement from some university students on the life span of an outdated industry.
The real estate brands of old, think they are in the business of making commissions - when what today's market demands are to bring people back into homes they can afford - and that means cutting out unnecessary commissions and distributing real estate between sellers (a lot of them banks) and buyers - in the most efficient manner possible.
The dinosaur, the "buggy whip manufacturer," the real estate brokerage agency: All extinct or endangered species. A great article from USA Today talks more about how to avoid the pitfalls of running a business that's running into the ground in a changing world "Don't fall into the buggy-whip mentality"
Perhaps our executives missed reading this article? Maybe they'll find it online...