realonomics

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 – 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:

Popularity: 15% [?]

REALonomics thinks lawsuits are good. Now that I have your attention, let’s talk. Lawsuits are good, if only because they are revelatory. They tell us something. Sometimes they tell us a lot. They give us reason to delve, analyze and ponder the intricate nature of corporate and personal motivations.

More importantly, for this blog, lawsuits within the real estate industry are to be analyzed to the end that we may extract the principals that motivate players and shape the models of tomorrow. Lawsuits, at least for REALonomics, are the judicial chess game battles between the existing controlling realms, complete with kings, queens, pawns, rooks and bishops and their emerging challengers. We look to lawsuits for new real estate model math, principals that spell change, good or bad.

It’s not the Suit, it’s the Resultant Outcome

When it comes to lawsuits we too often focus simply on outcomes, awards, winners and losers. It’s the knock out we look for. That’s not our intention here. Our objective is to wonder why and how things occur within the real estate industry, an industry where we have more than once predicted the soon to arrive fist fight for control. REALonomics predicted there would be a battle for supremacy. An industry fight without rules or referees. Our own in-house, knuckle busting, face bashing, fat lipped, bloody nose brawl to the death.

Round one has just ended…the fight has just begun. The feeling-out phase between the fighters will take a few rounds. Depositions, is what we call this phase of the fist-fight.

Industry Lawsuits are Always about us

ActiveRain (challenger) has filed suit against Move (champion). Who is ActiveRain and who is Move? The former is a company that created a blogging business model that has become the most single successful congregation of real estate industry bloggers, hands down.

The latter is, well, sort of us. Yes, you read correctly…us. We are suing ActiveRain, passively. Behind Move, defendant, is Realtor.com and thus the real estate industry’s member organization known as The National Association of Realtors (NAR). Move is paid by NAR. NAR is paid by, you got it…US!

It’s ActiveRain vs. Us if only from the dotted line perspective of our involvement with and membership in NAR to whom we pay dues. Move is no doubt free to conduct its business in ways it deems important. But remember, we are writing the check.

Our Own Speculation

Here’s what we “SPECULATE” happened, what predicated the suit and what the outcome might mean to the industry.

Phase One: ActiveRain’s membership of more than 70,000 real estate industry participants (agent, brokers, mortgage, title, etc.) finally showed up on the radar screen of Move. This created internal discussion, some distress and generated a plan on the part of Move to put the moves (pun intended) on ActiveRain by initiating a discussion to purchase them. Move is a publically traded company with a contract with NAR to operate Realtor.com, its official site. REALonomics “speculates” that Move would have been required to disclose their intent to acquire ActiveRain to NAR, since it represents potential ramifications to the operation of Realtor.com.

Phase Two: Documents known as non-disclosure agreements (NDAs) are passed between the parties and executed. NDA supposedly allow a free-flowing exchange of information the content of which is supposed to be protected from use by all parties with distribution of information to others prohibited.

Phase Three: A Letter of Intent (LOI) may have been executed at some point, allowing for the stipulation of price, terms, conditions and due diligence on the part of the buyer. It’s unlikely that the parties went straight to contract.

Phase Four: This is where things start getting sticky. ActiveRain made certain disclosures to Move pertaining to its business model, financials and other matters relevant to the buy out. Most likely, ActiveRain believed these disclosures to be protected by the NDA and indeed law.

Phase Five: Move has full possession of ActiveRain’s model, financials and collateral materials necessary for a contracted purchase. All that is missing is the code, the grail, the keys that will start the engine. At this point the parties have two differing opinions. Move’s opinion, as they will predictably claim, is that we didn’t have a binding contract…it was all due diligence. ActiveRain’s sense was that the deal was going to go down. We do not know if a formal written contract to purchase was executed.

Phase Six: ActiveRain makes its final disclosure. Giving Move full access to what it terms in the suit “highly sensitive material…in electronic format…in anticipation of the supposed impending close.” So, Active Rain claims that it believed the deal was ready to close and they delivered the goods within the timeframe for the closing date.

The Core

In short, this suit is about Move getting the goods and ActiveRain getting nothing. That’s the core of the suit.

REALonomics “speculates” that ActiveRain’s senior management may have been somewhat inexperienced in the fine art of NDAs as cleverly disguised instruments of corporate surveillance. We further predict that there will be what we term “weasel clauses” in the written documents used by Move.

Furthermore, REALonomics “speculates” that it is not entirely implausible that ActiveRain’s model posed a threat to the interests of Move and its operation of Realtor.com, including its future intentions to create social networking. After all, 70,000 ActiveRain members can’t all be wrong.

Our final “speculation” is that this fist fight represents the collision of new with old. ActiveRain’s model is successful, if for no other reason than the sheer numbers of participants. ActiveRain represents the neo-models that are emerging within the industry. ActiveRain represents the push toward freedom models, open markets, transparency, consumer-centric thinking, unfettered dialogue and what we have termed the “democratization of real estate.”

Could this be Corporate Shenanigans?

Did Move engage ActiveRain with a designed intention to surveil them? REALonomics doesn’t know. Did ActiveRain, like so many young, successful start-ups, recklessly release its “sensitive information” with a degree of naivety prior to locking-down the transaction? Again, REALonomics doesn’t know.

What we do know is that the forces of new and old are engaged in a fight to the finish. The financial stakes are enormous. Are those of us who are industry participants (members of NAR and our local ARs) in any way funding this judicial nonsense? REALonomics doesn’t know.

REALonomics thinks lawsuits are good because they are revelatory. They tell us something. Sometimes they tell us a lot. They give us reason to delve, analyze and ponder the intricate nature of corporate and personal motivations. They may well tell us where we are going in the future. Behind lawsuits there are things to be discovered that have nothing to do with the lawsuit itself and everything to do with the rest of us.

We encourage our readers to follow this suit, set for trial on December 2, 2008.

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Next to email, blogging is the fastest growing Internet communication model and it is ramping up by astronomical leaps and bounds. Growth, for now, is cult-like and unabated.

REALonomics is a late blogging bloomer, having been planted in the potting soil of the blogosphere a scant few months back. We need much more business model dialogue about how the concept of blogging fits into our industry. As of this post, both feet are not down yet. The other shoe needs to drop, so to speak, for blogging to become a useful piece of the real estate industry’s economic model. Without any intention of insult, allow me to say that for now, we are all first generation “Blahgers” with room for growth.

We are BLAHG 1.0 by any standard, present company at the forefront of this categorization. Turning the current Blahg-o-Sphere” into a truly “common place” component within our real estate models is going to be a tall order.

State of the BLAHG

Real estate BLAHGS will not be true economic contributors to our bottom line ROI until a set of fundamental shifts occur. These shifts are academic to change and essential to the open adoption of new models.

The State of the BLAHG within our industry is mostly self-serving. We all write, we all write for each other, at each other and about each other. This is BLAHG 1.0 because the economics won’t develop until the consumer is on board. Getting the consumer to board the train is a tall order because the value proposition that causes them to purchase a ticket is not yet clearly defined. We are still playing at this. This is BLAHG 1.0 because it is about us…only a few of us…and it can’t be about us… or just us and have any chance of truly working for the consumer!

Integration of the BLAHG

Our industry will need to dismantle part of its infrastructure and reassemble it from the ground up. Mostly, we need to examine the manner in which we connect sellers with buyers, consumers with our organization and how we integrate property offerings into multiple consumer-centric conversations.

It’s still about property. Real estate transactions remain unchanged at their nucleus. It’s still about a buyer. It’s still about a seller. It’s still about the money that makes transactions work. The modus, however, by which we bring the transaction components together in transparent environments is the next important step in the integration of the BLAHG into our business models.

Broker/owners need to lead the charge by learning about BLAWGs, by BLAWGing and by plunging themselves over the cliff into the BLAWGing abyss which is a new sea of opportunity.

Consumer Adoption of the BLAHG

An insurance professional made this profound statement to me a few days ago, “I don’t understand blogging, how it works and why it is important but it seems reasonable that we should do it and scary at the same time.” We had a conversation that evolved around how his company and the consumers doing business with it could benefit by BLAHGing with his organization. He remained frightened and unconvinced until I mentioned that BLAHGing could be a means for clients to become partners with him and a kind of sales force in the organization…this got his attention.

Before we can release BLAHG 2.0, the industry will need to first convince ourselves that the consumer is an extension of our enterprise, a true partner. Broker/Owners continue to exhibit a great deal of anxiety over BLAWGing. Let me just say it and get it out of the way; this psychosis is “RESTLESS BLAWG SYNDROME” (RBS). But it is a real mental impairment for the industry. Transparency is the nature of the BLAWG, its heart and soul. Transparency, to date, has not yet become the nature of the real estate industry. We are conflicted over this notion.

Consumer adoption of the BLAWG in our real estate models and in the open arena of commerce and conversation is going to prove a bit illusive for a while. In order to fulfil the BLAWG integration we need to accomplish the following:

• Convert ourselves to belief in BLAWGing; dispensing with fear;
• Discover the path to integration within our current models;
• Build BLAWGs that quadrangulate sellers, buyers, property and money with Brokerage in the wings;
• Integrate powerful consumer-centric blogging platforms into our marketing game plan;
• Provide BLAWGing opportunities at every level of the relocation blueprint;

We are in the midst of BLAWG 1.0, transitioning to BLAWG 2.0. Within a very short period of time we can enter BLOG 3.0, leaving behind the experimental era. Until we reach the BLOG, we must BLAWG.

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Part 3 - CityBlogUSA

This post is the third installment of a three-part series with Donald Teel, the Founder of e-Partner, and it addresses blogging in general and the CityBlogUSA Network specifically; its mission, model and functionality. In addition, this post looks at the place of blogging in real estate business model paradigms in a consumer-centric industry.

REALONOMICS: CityBlogUSA is a pretty stout venture, what’s the nutshell on this thing?
CITYBLOGUSA: The e-Partner team took a look at the blogging phenomena during the first few months of 2006 and made some important discoveries about blogs and blogging that we thought might guide us into that universe. We decided there were reasons it was a space we could not ignore.

REALONOMICS: What were the discoveries your team made and what were the compelling reasons to jump into the blogging ocean?
CITYBLOGUSA: “Ocean” is a good word to describe blogging and it was one of the discoveries; the sheer enormity of blogging as a social medium for interaction and idea pooling is profound. We also discovered that a lot of people were writing, only a few were reading and even less are commenting, leading us to conclude that we were still in the infancy stage of blogging as a means to new business models. We discovered that only a very small slice of blogs had what I would call “meat and potatoes” content…real view points, cutting edge thinking…and they ranged from the cute boutique blog to high-powered political blogs.

But far and away the largest discovery was that blogging isn’t really being used as effectively as it can be within the real estate industry to create peer-to-peer relationships and business models that can help owners of real estate companies. Owners don’t know much about blogging and are generally confounded by it. Finally, we discovered that only about 10% of all owners had a grasp of what blogging is; they asked us, point blank, “What is blogging?” While many are saying blogging is peaking, I’m saying, for the industry we have no clue yet what it can mean to us in terms of consumer loyalty.

Our reasons for creating the CityBlogUSA Network, however, were more than fanciful and had to do with our business belief about consumer-centricity within the real estate brokerage business and the fact that real estate companies should utilize blogging as a part of their business development strategies. We work from the premise that anything good for the consumer is good for the broker/owner…literally, everything, and this belief can ultimately create higher profits for owners. Having been one, I can say, owners are generally skeptical people and tend to be a little intimidated by consumer demands. Blogging allows us remove the sense of nervousness about opening up the operation to consumer scrutiny.

REALONOMICS: Tell us about the consumer side of the CityBlogUSA Network.
CITYBLOGUSA: We decided to take a risk and empower the consumer to do what the consumer is already doing or, in fact, wants to do…communicate with others about real estate, thus the marketing tag “Ask the people who live there.” Our first premise, which is the premise of blogging as a social media, was residents know more about living in a city than others do and should be afforded the opportunity to post information about not only real estate but any other topic they want to discuss, from acupuncture to zoology.

We believe the democratization of real estate is evolving at a quickening pace. Peers want to dialogue with peers. Consumers trust other consumers. We need to acknowledge this and create the business models that match this truth, rather than resist the change.

From the business side of the CityBlogUSA Network we asked ourselves a penetrating question, “why aren’t owners providing community-based blogging within the markets for residents who have a story to tell and consumers who want to relocate, need to sell where they live and buy real estate in a different city?

REALONOMICS: What were the reasons owners weren’t providing such a medium for their markets?
CITYBLOGUSA: Lack of knowledge, understanding, initiative, technology enablement and a dash of fear. Like I said, broker/owners, too many of us, didn’t even know what a blog was! Owners didn’t have the time or the technology savvy to create blogs, manage them and make them work.

When we started to tell owners we were going to empower residents in their markets to talk about their “favorite city and home town” via a social networking medium the top immediate question was, “who is going to police what they say?” Which is like saying, “we exist for our clients but we really don’t want total transparency and unfettered communication because we might not like what they say.”

REALONOMICS: Where is the CityBlogUSA Network now in terms of development.
CITYBLOGUSA: Square one…and, it’s a round BETA hole and our sledge hammer is pretty beat up. On a scale of 1 to 10, we are .0023418! Seriously, we took the WordPress Multi-User platform and had to do some pretty strenuous code enhancements to make it work in every State and City in the United States and within the entire e-Partner Community-Based Network. Every developer who does this will attest to the concept of “Protracted BETA” or, the work is never done. Right now the CityBlogUSA Network is up, running, being blogged, agents are joining, owners are joining and we are at about week four. The truly motivated are jumping on board because we are offering some degree of exclusivity to owners who want to be in the middle of this and the agents who want to position themselves. We are just scratching the surface and moving very deliberately toward solutions, avoiding jumping on every bandwagon that hits the Internet weekly.

We have no illusions about resident/consumer blogging. Despite the growth of blogs, the vast majority of consumers are still not fully literate about the blogosphere and how it can empower them…but, they are learning quickly, which is why the real estate industry needs to be at the forefront of the creativity and implementation curve, not behind the eight ball.

REALONOMICS: Where does the real estate industry fit into the CityBlogUSA Network?
CITYBLOGUSA: First and foremost, all that we do at e-Partner involves the industry with a primary focus on broker/owners and the consumer. We start there. However, we are not creating the blogging network so that it can feature real estate practitioners as its centerpiece; that would be counter-productive to the consumer-centric models we believe in and where the industry is going.

The CityBlogUSA Network is consumer and resident focused with broker/owners and agents in more of a supportive role, i.e., we are here, you can find us, blog with us, ask us questions, use our knowledge and invite us into your world if you choose to do so.

In this sense we are not like ActiveRain, which is far-and-away the industry leader for promoting agents and ancillary service providers at the front end of their solution. We don’t have a “come one, come all” element. In fact, we have a “first come, first served” model for agents. We are actually creating limited exclusivity for agents at the community blogging level. If you visit our Myrtle Beach blog, you will see agents from Century 21, independent firms and Coldwell Banker, while the South Carolina Blogging Network is used as a tool of another brokerage firm. I honestly believe the blending of the industry is the wave of the future and it isn’t a new phenomenon. Zillow, Trulia, ActiveRain, CityBlogUSA and others are doing it. In our traditional circles, we have resisted it to a large degree with the exception of Realtor.com, where all firms, brands and agents get to play.

What’s different about the CityBlogUSA Network is the consumer-centricity and resident focus. It will take us a while to get where we need to go, so we are in it for the long haul.

REALONOMICS: How do people get involved in the blogging network?
CITYBLOGUSA: Easy, they go to www.CityBlogUSA.com, pick a State and a City and hop into authoring, commenting and suggesting ideas to their hearts content. They can upload photos of their community through the PhotoBlogUSA component as well. If they are serious about exposure they can spend some money to promote themselves to consumers and residents by engaging in highly target ads.

If a user wants to hop directly into their State, they can simple dial in their browser to such locations as CaliforniaBlogPage.com, AlabamaBlogPage.com, MaineBlogPage.com, etc. Just hammer the state name into the address bar and follow it with BlogPage.com.

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The national resident blogging network known as CityBlogUSA has struck a deal with its national counterpart e-Partner and will be plugged into its nearly 30,000 city network.

This relationship creates a national tie-in to the vast community-based relocation network known as e-Partner and will include resident blogging, aggregations up and down the e-Partner Network from United States WebPage to the largest and smallest communities in all 50 States.

ePartner USA, Inc. developed one of the largest privately operated national networks several years ago and began delivering it to existing Broker/Owners in 2006. The CityBlogUSA Network is its second level strategy for the development of e-Partner’s transparent real estate platform that empowers residents and consumers to blog about their favorite cities or home town by posting information in categories known as a Park Bench.

Most importantly, the model positions Broker/Owner in the middle of the communication channels in both the e-Partner community-based network and the CityBlogUSA blogging platform.

We’re the Talk of the Town!

The blogs recently recognized the CityBlogUSA strategy as unique in its incorporation of each State blogging Network under a common URL nomenclature, such as ArizonaBlogPage, FloridaBlogPage, NebraskaBlogPage, etc. Each community in all 50 States is cross-hatched into the State Blog Page and with the National site www.CityBlogUSA.com.

www.CityBlogUSA.com affords any consumer the opportunity to post information about any local topic of interest to others within uniquely defined State and community-centric blogging networks.

In fact, www.CityBlogUSA.com has gone a step further, offering its users the opportunity to blog with words, using images to tell the story about life in a city. Known as PhotoBlogUSA, users can upload images that tell pictorial stories about a community.

Community-Based Blogging for Everyone!

The entire blogging platform operates under the premise espoused by REALonomics; that we have entered a new real estate economy that will become increasingly dominated by consumer-centric models. Again, e-Partner and CityBlogUSA are positioning Brokerage firms for involvement in the stream of communications that will inevitably result from a network that provides community-based blogging for everyone.

Ask the People who Live There!

REALonomics contends that consumers have deviated to some degree from utilizing real estate professionals as a first point of contact for community information when contemplating relocation and real estate investment, opting rather to “go-it-alone” in the cyber world and now in the vast corners of the blogosphere.

Consumers, according to everything analyzed by REALonomics, will still need and prefer the services of the millions of real estate professionals and that’s where e-Partner is positioning itself and Broker/Owners.

But when it comes to information about communities, CityBlogUSA encourages consumer to simply “Ask the People who Live There” for information about their favorite cities or home town. After all, who would know more?

The watershed between blogging in general and the CityBlogUSA and e-Partner Network marriage is the dedication on both parts to the empowerment of owners to reinvent how they interact with consumers and to providing owners with the ability to manage the transformation taking place within the real estate industry.

Popularity: 45% [?]