Can You Design The Future?

Jan 30, 2008  |  Michael Wurzer

I was contacted recently by the Virginia Association of REALTORS to speak at their Legislative and Education Conference in February. (I’ll be in Richmond on Valentine’s Day, if you’re in the area.) The Association representative who contacted me asked if I could speak on listing syndication but said I wasn’t restricted to that, and so now I’m trying to figure out what I’m going to talk about. I know that listing syndication will be a key part of the discussion, but I want to give a broader context to the syndication discussion, too.

I have this theory I’ve been batting around for about a year that the MLS industry is approaching what I’ve been calling a perfect storm. I described the perfect storm early on in the FBS Blog as having three fronts: (1) brokerage consolidation pushing MLS consolidation; (2) the web 2.0 movement, both inside and outside of real estate, is engaging consumers like never before; and (3) the Department of Justice lawsuit against the NAR, claiming NAR’s policies regarding use of MLS data on the web are anti-competitive and harming consumers. My theory is that each of these forces are coming together at the same time and could produce a perfect storm that will change the MLS industry forever.

In my post a few days ago called Attention!, I mentioned Andrew Groves’ book Only The Paranoid Survive and what Groves describes as “10x inflection points”, which I think is another way of describing my “perfect storm.” Importantly, Mr. Groves asks, “How do we know whether a change signals a strategic inflection point? The only way is through the process of clarification that comes from broad and intensive debate.” Mr. Groves is talking about strategy within a company, but I think the same approach is valuable on a broader scale, too.

And that leads me back to the question of whether we’re rushing along so fast in our lives, putting out multi-tasking fires, that we don’t have time, energy or patience for serious contemplation or “broad and intensive debate.” Are we listening for the signals or just hearing the noise? Without a doubt, the is one place where intense and well-articulated debate occurs, but is that really a “broad” debate? I have a strong feeling that many who should be a part of this conversation are not. Whether the industry is facing a 10x inflection point is an open question, but I believe it is a question well worth considering seriously.

But here’s a preliminary question: When do we have time for this debate to happen? Conferences are great, but an hour here and an hour there rarely produces anything new. When do we stop long enough to listen to each other and expand our vision of the future? When do we have the broad and intensive debate that seems necessary? I’ve written previously that the future of MLS is now and I’m wondering who will be the designers of that future?

As I consider that question, a pattern I’ve noticed here at FBS comes to mind. The pattern is this: (1) hire new programmer; (2) new programmer is super productive; (3) super productive programmer gets more responsibility; (4) super productive programmer gets bogged down with a whole bunch of super important things. This is what I was trying to say in my post the other day about paying attention. The new guy can pay attention so much easier because he’s new and doesn’t have an inbox crammed full. This is why upstarts often come in and blow people away with innovation, because they can form a small group in a far away place and take the time to think fresh.

So, my question as I look forward to the VAR leadership conference is whether the leaders of MLSs and Associations today will take the time to seriously contemplate the potential for a 10x inflection point or perfect storm brewing on their horizon. How will these forces effect the future? Can we design our own future?

11 Responses to “Can You Design The Future?”

  1. Jim’s curt comment is a telling sign of the problem. Nationally, he’s probably one of the REALTORS most involved in shaping the future of MLS, but could only muster a three word comment. I agree with you entirely, Mike. A whole bunch of people need to be thinking and working hard on this. As for your session, I think there is fear of change to the MLS. How dramatic will it be? How fast will it happen/is it happening? I will hazard a guess that 95% of the attendees will not have heard of Roost. Or Trulia. Everyone’s paranoid about Zillow, but they are probably the least disruptive of the three. Can you address those questions/issues?

    Looking forward to having you in R-town! By the way, Richmond was recently named the 19th most romantic city in the USA, so Valentine’s Day in Cig City ain’t so bad. But no, I can’t be your date.

  2. David Harris says:

    I agree Michael. I think most of us know what needs to be done, and when (now), but the remaining question is…. who?

  3. J.T. says:

    I may be a lot different than most who read this blog, but I think I may be similar to a lot of folks who rely on the MLS. Most of my history involves selling residential real estate.
    I think most Realtors tend to start out feeling like they own the MLS. We provide the information and we use it. It’s an exclusive club to which we are proud to belong.
    If you are in the business long enough it is natural to realize Realtors don’t own the MLS and, in fact, its’ expensive. You begin to feel like the MLS owns you.
    I have been working on a product for Realtors that utilizes, in a very small way, the MLS Roster. I have been thinking about future expansion possibilities.
    I began to call around to figure out how many assoications I would need to join to cover areas just outside of mine. There were a lot of them.
    A couple of times I suggested it would be more efficient for some of the MLS regions to join.
    One person told me it made sense but it would never happen because no one wants to give up their profit base. I knew that… but stated so frankly it made me pause.
    The MLS is a profitable business because it returns something of value to its customers. It’s customers, the Realtor, are a captive audience who benifit. The structure is maintained by enforcing strict rules.
    MLS has all of its data secured within its fence of rules and it only gets out when they open the gate.
    The fact is that the internet has changed everything. The fence of rules is strained, in fact the gate is wide open, but there is no stampede because no one really appreciates the fact yet.
    In the world of the internet everything is cheap. Here are the things I get free from Google: gmail, maps, google documents, google calander, google anaylitics, google Reader, google base, news feeds, a blog & a finance portfolio. They pay me for advertisments on my web site. They never threaten to fine me or cut me off.
    The problem is I don’t beleive they can maintain accurate real estate data the way MLS does.
    The Quikie Mart does not provide the same level of service that the full service gas station or neighborhood grocery. I prefer the old fashioned service, so why does the Quikie Mart survive?
    I am a small Broker yet with broker recipocity I can look big and compete with almost anyone.
    Loss of the MLS would hurt the small brokers the most.
    The small broker can help MLS survive if MLS helps them. Big brokerages are big business and well suited to the Quikie Mart Model.
    My mother told me there used to be somone in her town who made a living making buggy whips. The model T put him out of business.
    I hope I’m not making buggy whips.

  4. Jim Duncan says:

    I’m looking forward to hearing Michael talk more than almost anything else in the program, not just because of what he’s liable to say, but because I want to read and gauge the reaction of the audience. Will there be fear, uncertainty and doubt? Will there be acceptance or desire to stop the MLS’ evolution? What will be the conversations in the hallway, what will the reaction be? Will there be carryover beyond his talk?

    There is much happening in the MLS world today – from rules, regulations, IDX feeds, etc that is happening far too rapidly for many to comprehend, and much too slowly for others.

    Will he be able to broach the concept of divorcing the commissions? Will people understand the concept? I’m working on a post along these lines that spurred from a meeting I was in the other day – there seems to be far too much focus on the past, and too little on the present and future.

    The divide in MLS evolution is far more than technology; we’re talking about the evolution of an industry – a culture – that is adverse to change. Change is happening all around us; hopefully Realtors will have a say in the evolution.

  5. David, if you know what needs to be done, please share. 😮

    Jim is right on when he says this is far more than technology. Ben (or others), if you haven’t read them already (or even if you have), I encourage you to read three earlier posts of mine: MLS Is More Than Technology, The Future of MLS Is Now, and You Must Read This, If You’re Interested In The Future Of MLS On The Web. These are long posts, for which I no longer apologize. These posts suggest that the MLS is crucial to preserving the cooperation that results in the listing aggregation so valued today, that MLS leaders can and should define how that aggregation is to be used, and that designing social software is a key part of the rules or constitution of the MLS today. These are the conversations not happening. Industry participants like to talk about technology (the “Gateway”) or the “bad guys” (Zillow), but they don’t want to talk seriously about the fundamental rules on which they’ve been cooperating, such as commissions and private data silos. The questions that need answering are whether those foundations of cooperation are changing now and whether proactive change can be made without destroying the cooperation itself. Broad and instensive debate, that’s what I’m seeking, because I think the answers lie within.

  6. Love you comments!

    I think when you find an organization that allows for learning you wil have this.

    I read alot on the real estate forums and there seems to be this one Nationwide Brokerage Co. they all seem to talk highly of. They meet daily at 11:00 and talk with new staff and someone from upper staff and take the time to show them things and problem solve.

    They also seem to share leeds better in this agency as they form this connection with the agents. When you take this time to grow the organization people can share the load and not get bogged down. It’s about finding the right team working together.

    If you work with people just out for themselves or can’t trust others to do it right and take it on themselves yeah there amazing people very overworked amazing people.

    I rather work with the team approach.

  7. Sheila Strunk says:

    Very interesting train of thought, which raises numerous questions. Today, Realtors pay for the systems that make data available through the MLS (via their MLS dues) and provide permissions for that data to populate the web. When (I beleive it will happen eventually) this data is available without the MLS, who will pay the price? Will Open Source software exist that allows agents to choose their input mechanism of choice? And what happens to data integrity (which fluctuates with market conditions)?

    We frequently talk about the MLS boards needing to move forward at a faster pace and embrace Web 2.0 and social networking, but what about the agents? In my world, I find that a very small percentage of agents even realize that there HAS been a shift on the web – they are still operating under old paradigms, and no one is educating them about the future. If you can’t envision (and embrace) the future, you’re doomed to repeat the past. In a recent strategic planning meeting for our local MLS, I was surprised to hear more than one comment about “taking back” the data – in effect, trying to close the barn door.

    As Jim Duncan stated, this is a culture revolution, and most of the grass roots members are still buried underground, waiting to sprout!

  8. […] could they be where the future of real estate is engaged?  A few or several days of “broad and intensive debate“, with the best minds in the industry, about the interconnectedness of competition and […]

  9. J.T. says:

    Sheila, I don’t think Realtors will become educated. More likely the process will become more natural through development of web tools and attrition of older agents as newer agents move in and take their place.

    It won’t be software that brings about change, but web tools(like google documents replacing Microsoft Word) and communities that seem natural for Realtors to use. I have not followed the complete conversation about social networking but it seems obvious that MLS has concentrated on data more than the people who supply it.

    I am a customer, I like the people at my local MLS, but the system rubs me the wrong way.

    A small investment in this area would yeild a high return.

    I imagine as data migrates to the web we will lose quality.

    These two questions are the same:

    1. Would you rather pump your own gas or have someone do it for you?

    2. Do you want questionable data from the web or do you want quality data from MLS?

    Both questions seem to have an obvious answer, but they leave out other factors- such as cost.

    I know I will consider cost, how the transaction makes me feel and the accuracy of the data.

    How much data do we really need to attract a buyer and how good does it have to be?

    Talking too much — I’ll stop — sorry for the long post.

  10. J.T. says:

    Okay, one more thing – I had to post this.

    There are already Realtors out there who are moving away from MLS without even making a concious choice.

    The Realtor who writes this blog is obviously younger than me. I don’t know her, but she is an example of the coming generation of real estate agents. Comfortable on the web. Asking website advice on her blog and getting good replies.

    She is at least as comfortable with the web as she is with real estate.

    Note the search on her web page – evidentally easier for her than MLS.

    Is this something Trulia offers or is it her own creation?