“That’s the path forward.”

“What will it take?” Isabella replied as she placed her hand on Ferdinand’s locked wrist.

Christopher stepped forward.

“Three ships. A crew. And your blessing.”

Isabella gathered herself from her throne.

“Go forward!”

We know that Ferdinand and Isabella possessed little maritime knowledge. They did understood war, though, having spent the last ten years entrenched in a battle for the Emirate of Granada.

Focused on rivalries with their European neighbors, Ferdinand and Isabella remained mired in the demands of the moment.

Most rulers would have viewed Columbus’s idea to sail west to give Spain the upper hand in the spice trade as far-fetched. A costly distraction.

After all, this was 1492. No Google Earth. No GPS. No Skype. No Foursquare to find the best Sushi.

But Ferdinand and Isabella looked upon Columbus to take them places beyond what circumstances would seem to permit.

The trusted him. They understood that if they were going to prevail, they must take risks. And do what others were afraid to try, too war-weary to endeavor.

They acted.

Who is your Christopher Columbus?

As you look around at your rivals, it’s easy to blame yourself for providing them the means by which they claimed an advantage upon you.

“If only we didn’t give them our listings.”

 “If only we didn’t give those top producers such lavish splits.”

“If only we had seen the crash coming.”

Sure, these may have been mistakes, but they are of the sort we’ve all made. They wound but do not kill.

Not continuing to move forward on another course in spite of these things is the graver error.

Remember, Columbus’s success came from a massive failure. In his grand attempt to sail to India he ended up in the Bahamas.

His ability to course correct turned that failure into a success that spurred Spain’s colonization of the South Atlantic and set the wheels of change moving in a New World.

Without him, Baywatch may never have been created.

If you aren’t moving, it’s likely you don’t have someone like Christopher in your court.

Swabbing the deck

When Steve Jobs returned to Apple he pulled a handful of people into a bunker, built the iMac, and killed dozens of lesser products.

The other day, software maven Jason Fried wrote, “Sometimes, the best way to improve something is to begin again from scratch,” in reference to rethinking his best selling product.

These people are no brighter than you. But they understand that time doesn’t stand still.

If you stand still, you get hurt; you get hurt enough times, you die.

From my dingy, bumping around the docks of real estate, I see many wonderful vessels tied to the horn cleats of recrimination.

They are withheld from new opportunities – new routes that could take their crews into the wild blue ocean.

It’s time to cut the moorings.

Open the hatch and broadcast what you know. Provide answers to a marketplace full of questions in a way that moves people.

Stop playing games with Facebook and get serious about how people connect with people to acquire local information. Right now, I can log into Zillow using Facebook, view homes on a map and see friends who are nearby (see right corner of image below). Where are you on this map of the New World?

Reclaim and re-imagine your digital territory. Do you realize that any Mac user can download Dragon Diction and talk to their computer? This is just the beginning. Siri is now in your phone. Soon it will be in your iPad. Then your laptop. Keyboards and mice will be obsolete.

Everything around you is being disrupted. Displaced. Destroyed. Replaced by new ways of connecting, knowing and deciding.

Ahoy

Homes will sell with or without the real estate industry we know today.

If you want to win tomorrow, don your crown, find your Columbus, and bless him to take you forward.

Land ho!

The bottom line: they are scaling back buyer rebates – the “discount” that got them so much attention early on – to fund a more personal, “traditional” customer experience.

To make that happen the company is hiring 50 additional agents and outfitting them all with iPads and mobile devices.

Kelman explains how the new model will work:

The price increase for buyers will affect some more than others. With Redfin 2.0, we refunded 50% of whatever commission we got from the seller, but the actual amount depended on the final sale price and the percentage of this price that the seller paid to the buyer’s broker.

Under Redfin 3.0, we now offer a fixed-dollar refund for each listing. As a percentage of the sale, this amount increases with the home price. We refund about 25% of whatever we get for a $300,000 home, resulting in a roughly $2,000 commission refund. For a $1-million home we refund 45% of the commission, for a refund of roughly $13,000.

This shift was perhaps inevitable. Discounting is a hard model and tough to scale – Zip tried and backed off; franchisors like Help-U-Sell and Assist-to-sell remain small players. Now it seems that one of the more aggressive proponents in the space is backing off too. Not completely, mind you, but they are inching back from a line they drew in the sand.

Don’t count them out

Redfin actively scoffed at the industry for the first few years of its existence. Many observers will remember yard signs being pulled up, “Barbie” gaffes and, of course, the infamous 60 Minutes video.

Five years later, however, you have its CEO saying “we actually want to be just like traditional brokers” – a remarkable about-face.

But really, the most interesting part of the Redfin experiment has always been watching a real estate company grow around two core principles – the web and customer service. You don’t see many big brokerages or national brands investing as heavily as Redfin does in technology (and shouldering as many expensive Seattle engineer salaries).

Nor do you see many companies putting their agents on salary and measuring their performance on customer satisfaction versus “productivity” or unit sales.

In my mind, that has always been what makes the company unique. The rebate was really always just a hook that got a lot of people’s attention – much like Zillow’s Zestimate in the beginning.

If Redfin 3.0 is about them maturing into a “real” real estate company – than so be it. It may remove one of the more inflammatory slights that was often leveled towards them.

That might just open a few people’s eyes to what they’re really trying to do. And that, I wager, could be a very good thing.

Below I lay out a few things I believe to be true. They are all debatable, of course, and may, in the end, prove to be completely wrong. Be that as it may, my overall approach inclines toward practicality.

There’s a problem between brokers and online publishers, and both parties stand to get hurt if it’s not solved.

Let’s get to work solving it. Shots will be fired, but ultimately this comes down to negotiation.

So, for your consideration…

1. The manner in which Trulia and Zillow currently handle buyer agents on listing detail pages is unreasonable.

Realtor.com allows brokers to kill the “4-headed monster” on their listings without paying. This is better, but there’s got to be a way to monetize a listing that respects those who provide them while still allowing online publishers to generate revenue.

2. Perhaps a consumer shouldn’t be urged to contact the listing agent. And an airline shouldn’t charge me to check a bag, either. But that’s the way it is. It’s business.

Sure, there are discussions to be had about the future of the brokerage business model. But in the meantime, we have a more immediate matter to address: content owners don’t like how their content is being used. Let’s work on that.

3. Brokers that cease syndicating without a countervailing digital strategy in place will probably get hurt.

We are at an interesting point now with technology, where what we think of as “online” is shape shifting before our eyes. Soon, more people will view listings on smart phones, tablets, e-readers (and whatever voice, gestural or neural interfaces emerge in the not-to-distant future) than on the web pages we’re all focused on now.

The unprepared brokerage, by ceasing syndication, is not just removing its listings from a website. It is vanishing them from a digital world that’s just dawning.

Brokers may not like their digital partners, but these partners have the capacity to take them to places they’ll need to be in the future.

And, sure: If you’re a big broker with significant share, loads of brand equity, low dependence on out-of-market buyers, solid digital assets and a good internal marketing team you probably will not mortally wound your business by ceasing syndication. But these companies are the exception.

4. The costs of cooperation, long-term, are lower than the costs of retrenchment.

Though there are very important differences between IDX and syndication, there’s an underlying reality those who participate in both confront: buyers will approach listings from many places, through many people.

It was nice when sign calls drove most inquiries to the listing agent. But I don’t think we’re getting that back. I also think the power of the listing as a vehicle for agent marketing and brokerage branding never will be what it was pre-digital. These are realities driven by consumer expectations unlikely to be stifled, for long, by industry maneuvers.

So, yes, when brokers cooperate with online publishers through syndication, or with competitors through IDX, some buyers agents will essentially free-ride by using listing inventory to secure clients, some of the agents shepherding buyers through their listing may not be area experts, and they will lose some control over lead routing and monetization.

But having been inside hundreds of brokerages, looking at the numbers, the metrics and the conversion funnel top and down, the costs of cooperation, while real, are usually (yes, there are exceptions) less than the costs of retrenchment.

5. Love the one you’re with. Your next relationship may be even worse.

If syndication is pulled apart like a piece of string cheese, and if IDX unwinds next, Zillow, Trulia and Realtor.com may go away and big brokers will have achieved something that won’t feel like victory for long. Because what replaces them may be even more odious.

Compelling consumer behavior (in this case, “you will come to my website or app to view listings”) is difficult unless your brand, your product and your user experience are all superior. Apple and Southwest Airlines make such demands of consumers, and we tolerate them, because, well, they are Apple and Southwest Airlines.

Most brokers aren’t in a position to pull this off right now. So what will arise, once the beasts of today are slain and consumers cry foul, are marketing and distribution partners that will likely charge much more for access to consumers whose expectations fly beyond the average broker’s reach.

Remember: the rest of the world is pay-to-list. Negotiation now seems smarter than rolling the dice.

And, on the flip side… online publishers may gripe about unreasonable brokers now, but trying to aggregate 4 million listings from agents will make today look like a walk in the park.

6. What we need, quite urgently, is a new online listings compact.

Such a compact must be more respectful of listing owners, yet still allow the online publishers to invest in innovation from which brokers and agents can benefit.

Invective is easy and sometimes gripping; cooperation, while much harder, is still possible.

If you want to work to make this happen, drop me a line.

[Disclosure: Realtor.com is a client of 1000watt Consulting, though we have no involvement in their listings policy, or the manner in which they sell products].

We do this to better advise our clients on what’s out there and to prepare ourselves to respond to those innovative clouds building on the horizon

This was the result of this year’s effort:

There’s a lot of meaty stuff on that whiteboard. Much of which we hope to feature on our blog or in our 1000watt Spotlight email newsletter (have you signed up yet?).

One of the more exciting trends we’re keeping an eye on closely these days is immersive environments.

Consider this app:

Tour Wrist resuscitates the 360 virtual tour, a play not new to real estate but one that’s long been on life support. Rather than spinning an image around using your mouse, Tour Wrist makes use of your device’s internal compass and gyroscope. As you move your iPhone or iPad around in real space you mimic the view of the panorama on your screen.

It feels a little goofy doing it, but the effect (especially on the iPad’s larger screen) is transfixing. You really feel like you’re peering through the ether into another place.

It’s no wonder it walked off with the 2012 Best of Show award at last week’s Macworld | iWorld conference in San Francisco.

Swivel is another exciting development. The app uses Microsoft’s Kinect technology to create a virtual dressing room where you can try on virtual representations of real world goods.

The demo is pretty impressive stuff.

Clearly there are some cues here for real estate. Getting a real sense for a particular property has been always been elusive online. We’ve layered photos on maps to provide them with some degree of geographic context. Smartphone cameras and photography apps like Instagram have given us a peek into a what makes a neighborhood or property truly special. And video may finally be making a dent in Realtor marketing budgets this year.

But nevertheless, we have yet to truly get inside a home virtually. To explore it untethered.

The notion that we’ll be able to transport ourselves virtually may seem like the stuff of science fiction today. Tomorrow, I’m not so sure.

I think we’re heading in that direction.

Trulia launched Trulia Insight, a product that delivers behavioral data on leads to agents. It’s an add-on to their main Trulia Pro subscription ad product.

This sort of lead scoring is not new (Point2 released a similar product years ago, and many IDX solutions offer a window into user actions), but the execution is excellent here and the product is national from day one.

Anyway, a few observations:

• If I were a broker, I’d be on the phone now asking my tech vendor why I didn’t have this in 2002.

• This is just the tip of the iceberg. Trulia is mining its own data here, but imagine when user behavior on other sites (yes, that’s trackable), Facebook actions and other signals from the wider web are in the mix…

• Which leads to questions of privacy, a big issue that has yet to generate significant heat within real estate. The folks over at Buyfolio have something to say about that.

…

Move, Inc. launched the Real Estate Network (REN).

Bottom line:

Brokers can now choose to syndicate their listings to big franchise sites through ListHub. Or they can choose not to.

I think Greg’s take is right on, but don’t think REN alone is going to be a game changer.

The larger and still-evolving struggle to escape the IDX headlock without destroying its cooperative underpinnings will be, over time.

Stay tuned.

…

Facebook announced 60 new apps that integrate with its new Timeline layout. They record events in your life – from what you gave to charity to how far you jogged today.

Who will be in the mix first with the “Bought my home” play? What will be done with the resulting data?

Did I mention privacy and listings policy?

…

TheRedPin, a Toronto-based brokerage that launched in 2010 with a focus on the condo and new construction markets, released a full-on VOW.

Forget for a moment that they offer a buyer rebate, have agents on salary and even have a name pretty close to Redfin. Go to school on this VOW implementation. It’s the best I’ve seen.

…

A friend pointed me to TrunkClub this week. This company provides men with personal shopping at a distance. You submit a profile and your sizes and TrunkClub delivers a hand-selected “trunk” of clothing to your doorstep. You pay for what you keep and send back the rest. Shipping is free.

Services in this vein are sprouting up all over the place, and it makes me think both of Marc’s post describing the rise of consumer-to-consumer commerce and Joel’s write-up of Louis CK’s obliteration of the media value chain.

Are we headed, after 15 years, to a reality where consumers do their own deals and agents are reduced to something like a hotel concierge/notary hybrid? Will the slumbering beast of disintermediation finally rise?

I don’t know, of course. But the ground under the real estate business model as we have known it is feeling more unsettled to me right now than it has at any point in my 15 years around this industry.

We tend to work with brokerages – all of them quite “traditional” – that feel this too and are working to account for it. Their foresight secures their future. But most remain unattuned to this reality.

That’s scary.

…

Zillow released Neighborhood Advice, a Facebook integration that shows home shoppers which of their friends (if any) live within, or have checked-in around, the area in which they are searching. The idea being that those local connections can provide trusted advice.

It’s a good idea, and one I expect to see pop up on other sites soon.

…

I look at everything above and am struck by how it ties together. Listings policy, data, privacy, social commerce, challenges to incumbent business models… it’s a powerful mix of forces that will make 2012 a year to remember.

Thanks for reading!

[Disclosure: Move, Inc. is a 1000watt Consulting client]

In short, you hand over your fiver, get the video, and do as you please.

By all accounts the experiment has been a success. Louis grossed over $1 million dollars in little more than ten days. These were dollars that went directly into his pocket. No network or cable channel in the way. No middleman. And better yet, he retains the rights to the content in perpetuity.

I bought it. First, because the dude is funny. I mean seriously, eye-wateringly, doubled-over funny. And second, because I believe strongly in the distribution model he chose and I wanted to support it.

But what really grabbed me was the way he spoke to me on his website. There was…

No BS

Let’s take look at the copy.

If you decide to pull the trigger on the purchase you get this:

I’m really glad you pressed BUY THE THING! So here’s what’s going to happen now. You’re going to enter your email. Then you’re going to go to PayPal or Amazon to pay. After that, you’re going to be sent right back here where you can immediately watch the movie or download it.

Pretty straightforward, right? As you fill out the checkout details, you get prompted to sign up for CK’s email list:

I’m going to be offering other things through this site.

Would you like to hear about them?

•  Yes, I’d like to receive further emails about Louis C.K. things.
•  No, leave me alone forever, you fat idiot.

And by default, “No” is checked for you. This is a clear example of how you…

Respect your user 

Granted, this is copy from a guy best known for a riff on our selfish attitudes towards technology and the tone might not fly on every real estate website, but the lesson is still worth absorbing.

Too often when we look at real estate websites, we see a bewildering mess of terminology. Naming conventions be damned, and important actions on often are buried under a mountain of buzzwords, neologisms and misappropriated terms.

All of this causes confusion with the user.

When we first sit down with a client, we reinforce with them the need to be clear and direct. We peel back the layers of wallpapered marketing-speak and lay down a new coat of copy that communicates to the user in a way that makes sense to them.

It’s important to note here that this doesn’t mean you have to sacrifice your brand’s voice. In fact, the more plainly you speak, the more strongly your brand begins to shine.

Funnily enough, this is a simple lesson taught by a comic. Be clear and call things what they are. Respect your users and they’ll pay you back in spades.

So if you’re looking at your website this year, bear in mind that what sounds good you, or what you feel you want to say, but not be what your user wants to hear.

And seriously, if you haven’t bought Louis’ video yet, go drop the five bucks. It’s well worth it.

Kaboom!

Shrapnel

According to William Gibson, the future is already here. It’s just unevenly distributed.

Gibson believes the future is ever present. It’s spread about in particle form waiting for someone to piece it together. Given the persistent inter-connectivity of people through the giant digital network called the Internet, this piecing together – the work of innovation – now occurs very, very fast.

The shrapnel of progress has obliterated things we believed to be fixed objects. Music. News. Commerce. Services. A century of analog music recorded on tape and sold on vinyl has disappeared into the ether in less than a generation.

We will find no resting place.

This condition is both frightening and beautiful, like a George Romero movie.

Change is terrifying. But you can’t prevent it. So embrace it.

Everything is ripe for…

Displacement

If you sold real estate between 1945 and 1995, your biggest challenges were mastering call waiting, learning how to shove a sheet of paper into a fax machine and leaving a message on voice mail.

Slow, turtle-like change.

Fast-forward 15 years. The social web. Pocket computing. Apps. Ambient connectivity.

Mind boggling stuff.

If you grok William Gibson, you ride these tides. If not, you kick against them, exhausting your energy fighting the inevitable.

There are a riders and fighters in real estate. The fighters still can’t nail a decent Website. Or market themselves effectively in a post-print world. They are drawn to every shiny new piece of cyber garbage. And they revile the riders.

This leads them to…

The eve of destruction

Lets place the puzzle pieces on the table.

Etsy, Taskrabbit, AirBnB, GetAround and Parkatmyhouse are among a raft of new companies upsetting the traditional car rental, vacation rental and flea markets. They connect strangers with strangers and make them comfortable doing business with each other.

Square and BankSimple are lobbing grenades at traditional banking.

Pirq delivers Seattle residents instantly redeemable retail discounts based on their location, effectively torpedoing the direct mail brochure and coupon book in the process.

Zuuvu, Klout and Kred are just the tips of a cultural and commercial iceberg that will make transactions between strangers more reliable.

StreetAdvisor, Nabewise and Everyblock are turning citizens into neighborhood reporters.

Peers communicating directly with peers. No bullshit.

2020 is eight years away. Is it so far-fetched to think that in eight years this tide will rise upon real estate’s shores?

If you believe the consumer will need the 1995 version of real estate brokerage in 2020, forget the Mayan Calendar… by that point your world will have ended.

The dawn of the future 

We believe there will always be a place for real estate professionals, and for the brands and brokers that support their work. But there will be fewer of them. Those that will be rocking in 2020 are piecing together the future right now.

The glimpses of tomorrow – all that crazy stuff I mentioned above – can be platforms you build or leverage. The zombies plodding outside your cabin door need not be terrifying if you walk out to great them. Look at those around you who fight against change, and increase their distance form your working life.

And keep in mind that the future can be more than something that happens to you. It can be something you build.

[Disclosure: StreetAdvisor is a 1000watt Consulting client]

So this is going to be on the short and kinda fuzzy side.

…

Amazon has purchased the domain casa.com.

Remember, this time, when they come for the listings, hide them under the bed!

…

Speaking of listings, the whispers about various plans to “build an industry-controlled Zillow/Trulia killer” are building.

When I hear these, I think:

• Isn’t that Realtor.com?

• Wouldn’t it just be easier and cheaper to stop giving them your listings or require rules for their display you are more comfortable with? I mean, that’s not easy, but still…

• Yes, he did do a great job running IT for FAR back in the ‘90’s, but do you really think he’s got what it takes to take down Zillow? 

• So the idea is to address concerns about third-party websites taking share from your company website by creating another third-party website?

It’s going to be an eventful year.

…

I need to understand Facebook for work, and think it can be very valuable for brand purposes, but I do not like it personally. The introduction of Timeline to the already Byzantine interface took things to a level that approaches casino-like cynicism.

A casino is an environment carefully designed to produce in its guests a state of bewilderment that detaches them from the reality and consequences of their activity.

That’s what I’m feeling in Facebook these days.

In real estate, where public, private, personal and professional swirl together, it pays to be very, very careful.

…

A mobile app called Menu and Hours is in development as an alternative to the review and photo-choked food app space.

I makes me think we should build a real estate search app called Price and Photos.

I’m serious.

…

This story about a cabbie that rocks Twitter for his business is worth reading. The takeaway: Focus, stay on message, and give people something they want or need. Sounds simple, but it’s something I sometimes forget.

Have a great weekend. I hope to see many of you at Inman next week!

[Disclosure: Move, Inc., which operates Realtor.com, is a 1000watt Consulting client]

These are things that real estate typically outsources to outside experts, and everyone seems OK with that.

Yet along the way up the bar, most choose to manage the marketing and packaging of their brand themselves – an odd contradiction, if you ask me.

A real estate Brazilian

Brand campaigns aren’t cookies you bake at home. Or a pot of goulash into which you throw pinches of this and that. It’s the singularity you weave into everything you do to stand out.

Technology has gifted us with many implements with which to work at this. They empower the user, but can also falsely lure them into believing they are “building a brand” when in reality they are simply making a mess.

You risk sliding down the bar you wish to climb. You’ll gravitate to that which is convenient, or free. You’ll write words that you would never speak to people.

Perhaps you will fail to realize that the stock image of a handsome couple you chose to portray buyers on your collateral may also be the erectile dysfunction models found on a pamphlet at RiteAid’s prescription counter.

Technology has been generous. But it can’t provide strategy – and the discipline required to wax your real estate brand to a perfect Brazilian.

Great brands don’t skim edges. They meticulously groom their campaigns to evoke desire within people who want their product or service. And when that personal connection occurs, when what you do matches how you appear, you create something timeless: A brand.

When you fail you become just another nameless, faceless agent. Or brokerage. Someone or something that just sells real estate. 

Climbing

Maybe you have gone the distance. Honed your brand to perfection. Raised your personal bar. You’re ready to rock in 2012.

Why risk the final, grand reveal of who you are through a do-it-yourself, arts and crafts marketing campaign? Leaving your brand obscured beneath a tangle of shoddy marketing and expecting, hoping, praying, that people will search for it is too grand an expectation.

You don’t cut your own hair. You don’t build your own cars. You don’t cobble your own boots or manufacture your clothing – the things with which you adorn yourself to create the picture of who you are to the world. You seek professionals to help you look great.

So find seasoned marketers.

Let them do their job.

So you can spend more of your time climbing.

Thank you for reading, for commenting and for being part of the community that supports us. It means a lot.

If you are on our 1000Watt Spotlight mailing list you got this last week. As a very small gesture of our gratitude, we’ve packaged up some of our favorite issues of 1000watt Spotlight. Perhaps you’ll find something you missed; or, if you like, share it with an industry friend.

If you’d like to make sure you get every issue of Spotlight in 2012, head on over and sign up!

Thanks

Marc, Brian and Joel