When The Fur Starts Flying; It Pays To Focus on Basics
Part of the challenge for all leaders is not just the variety of change taking place today, but the pace of it. Seems like every day there is a new threat, and THAT THREAT IS ONE THAT WILL KILL YOUR BUSINESS—at least that is what they want to believe.
For brokerages, it's not just all the new business models, it's also the fact that some are far better funded than most we've seen in the past. Not just $20 million, but $200 million. Most are targeted at niches in the housing or brokerage markets—not broadly. But still, there is that nagging worry.
Well, you can’t spend your time worrying about all of these. Focus on what you can control. You can control who you recruit and retain among your agents. You can control what you spend and where you spend it. You can and should be far more intentional about the data of your business and market. And, you can understand how, when and where to communicate with the people of your company and help them do the same for their customers.
We should not focus on the next well-funded disrupter or what is cute and faddish.
Contradictions and Distractors
Someone in our industry recently wrote that “the market value of Zillow now exceeds Realogy, RE/MAX, Redfin, Compass and Keller Williams combined." Wow, now that is startling. Good for the Zillow investors and leaders. Great job.
But what does that have to do with the health of your brokerage, or for agents and teams? What does that have to do with your practice? Nothing is the correct answer.
First, one has to assume that the investors know something that we don’t know. They may think that Zillow is going to dominate every facet of the realty business and gain a huge share of the brokerage commission pie along with that in the rental and mortgage market. Or, they may think that some even bigger fish is going to swoop down and gobble Zillow for far more than its current valuation.
But, it may also be the case that they are wrong. That while Zillow is a superb company with great prospects, it may never achieve the earnings to justify the value it has today. Investors are like gamblers. And, they often act with a herd mentality. When one or two investment firms like a company; others pile in. They don’t want to miss the run-up.
The fact is no one really knows how the Zillow story turns out. Any more than we know how the Redfin or Compass or eXp stories turn out. Business history is full of stories and companies with great momentum and prospects, but they never quite live up to their hype.
While it's interesting to say something about the relative valuations of Zillow and others, it doesn’t say anything definitive about what will happen in the future.