Wikinomics is a book by Don Tapscott and Anthony Williams. If you haven’t read it yet, do yourself a favor and get it. It is a good interesting read on how the Web is no longer about idly surfing and passively reading or watching, but how it has evolved into a new dynamic form of community and creative expression, one of sharing, socializing, collaborating and creating communities.
Participation has, according to a Wikinomics, reached a tipping point where new forms of mass collaboration are changing how goods and services and invented, produced, marketed, and distributed on a global basis. Now the perfect storm of technology, demographics and global economics is an unrelenting force for change and innovation.
They pinpoint 2006 has been the year when the programmable Web eclipse the static Web, on every level. For example:
- Flickr beat out webshots
- Wikipedia beat out Britannica
- Blogger beat out CNN
- Epinions beat out Consumer Reports
- Google Maps beat out MapQuest
- MySpace beat out Friendster
- Craigslist beat out Monster
The losers were websites. The winners were communities.
Wikinomics believes that profound changes in the world of technology are giving rise to power new tools based on community and collaboration. We are a new economy Ã¢â‚¬â€œ a vast global network of connected people that swap and exchanging ideas, information and an endless list of other services.
And from where I stand I can see it happening to our industry as well. The real estate industry is changing and the thousands of blogs, social networks and the wikis are already laying the foundation for the new world. New business models are already being born, new paths already being charted and new leaders already being groomed.
Real estate over the next decade will change forever and Wikinomics may shed some light as to the path.
Below are a couple of examples of social networking in action:
Do you remember this woman? She is the one who filed a lawsuit against a RE/Max agent named Michael Little who she and her husband accused of selling them a $1.2 million home they say was worth substantially less.
Marty Ummel appeared on national television news programs such as the Today show claiming that she and her husband, Vernon, were deceived by Little in the process of making their purchase.
A jury of twelve (10 women, 2 men) were not convinced and delivered a unanimous decision after a quick two hour deliberation declaring that Little did not breach his duties and was not negligent in his actions on behalf of the Ummels.
Wendi Brick, jury forewoman, explained the verdict by saying, “We felt that yes, he had acted on their behalf, and we felt he met his fiduciary duties as defined…In any kind of purchase, especially one that big Ã¢â‚¬â€œ and most of us have had our own situations we’d been through Ã¢â‚¬â€œ the bottom line really stops with you. Whose final responsibility is it to sign a contract? It’s yours…”
Little described his feelings by saying, Ã¢â‚¬Å“I feel incredibly relieved and vindicated…it has been more than two years of quite problematic times for me, and I’m happy to get it behind me.”
The real estate industry has always tried to be a closed environment. The real estate industry has traditionally been a control environment. With few exceptions, our models have typically created an “us” and a “them” or, those who are insiders looking out and those who are outsiders looking in.
We are now facing the prospect that we are them and they are us! The once safe environment of our cozy aquarium is being invaded by “them” in droves. They are asking for all the rights to the environment heretofore granted to the “fish”…us. Or, they are proposing that we leave the tank and join them in a new form of existence.
In traditional business models, secrets are often deemed necessary and access to “insider” (the fish) knowledge is viewed as a threat. Free, open and unrestrained information is usually viewed as a corporate debacle and dangerous to the survival of insiders.
Our Real Estate Environments
The unraveling of any business environment starts at the fringes of the model and moves inward toward the epicenter. That is what is occurring in the real estate industry. The hairline cracks in our closed tank system are becoming open gorges where all that we have held sacred (secret) is spilling into the streets where the distinctions between “us” and “them” are being blurred by the Democratization of Real Estate.
Stefan Swanepoel recently posted the thought provoking question “Is the Future of Real Estate in Google’s Algorithm?” The mere addressing of this interrogative forces the industry to reexamine its operating models in the midst of a consumer-centric era.
REALonomics remains uncertain with respect to the ability of the real estate industry to retool itself for life in a new environment.
Learning to Live Life outside the Tank
My daughter once had a goldfish she affectionately named Nori. Nori lived in a small aquarium on the nightstand next to her bed. Twice each day Nori was fed from an entity outside the aquarium. Nori peered at us, we at Nori. Nori, without fully appreciating her situation, was living a life of total dependency on my daughter.
The analogy hardly needs explanation. We are Nori. Nori is us. My daughter is the consumer. She is one of “them” to Nori.
When it came time to clean Nori’s aquarium, we would all gather around and gently scoop her out with a small net, place her in a temporary environment, clean the aquarium and then return her to the environment to which she had become accustomed. Nori could not live outside the tank…her existence depended upon a certain environment.
Can the real estate industry learn to live outside the tank of traditionalism in a world where the operating rules are decidedly different? Can we live without the aquarium? Can we evolve from dependency on controlled isolation to the open world of life without gills?
Can we learn to live and operate the real estate industry and our local business models outside the tank where we have created and experienced a deceptive pseudo security?
Can we shed self-imposed gills and fins and dependency and control in favor of the freedom of an open sourced environment where tanks are the stuff of folklore and where our lungs can breathe the air of innovation and partnership with “them?”
As firmly as IBM ruled mainframe computing and Microsoft the personal computer age for many years, so currently Google today rules the Internet. Originally nicknamed “BackRub” in 1998 by Stanford University buddies, Serge Brin and Larry Page, Google has not only become one of the most admired companies of the modern day but has found itself into our every day language, with the verb Ã¢â‚¬Å“googleÃ¢â‚¬Â being added to the Oxford dictionary in 2006.
The stock price rocketed after its initial public offering price of $85 dollars in August of 2004 to over $720 in November 2007. At that time only Exxon Mobil Corp., General Electric Co., Microsoft Corp. and AT&T Inc. had a higher market capitalization among U.S. companies. Today at around $470, nearly 40% from its high, Google still commands a market capitalization of over $110 billion and continues to battle with giants such as News Corp. and Microsoft.
Google, with its network composed of hundreds of thousands of servers, Google’s system never ages. When its individual pieces die, engineers just pluck them out and replace them with new, faster boxes. This means the Ã¢â‚¬Å“Google cloudÃ¢â‚¬Â regenerates as it grows, almost like a living organism.
At the same time Google at some accounts has become the gatekeeper of all information. Google also advises us that Ã¢â‚¬Å“real estateÃ¢â‚¬Â is the most searched category on the Web – with the 2000-05 housing boom and the subsequent sub-prime and foreclosure catastrophe, this is maybe not that all surprising. But let’s look beyond that for a second.
With some 141 million individually identified pieces of property in the U.S., real estate is at the very center of the American way of life Ã¢â‚¬â€œ whether living, working, sport or entertainment. As Google conducts more real estate searches it aggregates more real estate information. Potentially with each new property search, each new listing added to its Ã¢â‚¬Å“deep searchÃ¢â‚¬Â database, each virtual street tour completed, each foreclosure filed, and so on Google gains more knowledge of the real estate industry.
It actually is becoming increasingly harder to wrap your mind around just what exactly Google is Ã¢â‚¬â€œ and more importantly what it may become.
Could Google become the best advertising vehicle of all time to find and to market a house for sale?
And if it does, could that reduce the need for various traditional real estate brokerage services?
And if yes, to what extent and in what way, could Google influence the fundamental re-engineering of one of the oldest sales professions?
What are your thoughts?