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Real estate tech “platforms” were a hot topic a few years ago at Inman Connect conferences. Executives from proptech and old school companies chatted up their prospects of building an integrated set of services and products.
Not anymore. Like gratuitous selfies, platform gobbledygook has worn thin.
Even the monstrous tech platforms are suddenly challenged.
Facebook, Google and Amazon all tried to do too much and have been slammed for their crazed expansion plans. Faced with accelerating costs, slowing ad sales and intense government scrutiny, they missed Q3 earnings targets this month with humbling prospects for next year.
Are these companies on the road to a bigger disaster? Unlikely, but some sprawling enterprises do bloat their way to failure.
Beginning as a phone company, AT&T carelessly spread its wings, even trying its hand at becoming a media company when it acquired Time Warner. A calamity.
Now it’s back to being a phone company (+internet), where Alexander Graham Bell started the business in 1877.
The big idea of lacing together products and businesses under one roof, on one platform, promises synergy and profitable cross selling. But it also can become a disconnected, expensive and unprofitable adventure.
Zillow, the reigning digital real estate king, has a platform that’s still a work in progress.
Leads, mortgage, apartments, transaction software, house search, showings, Zestimates and iBuying were just a few of the pieces that the company was cobbling together on a single platform.
But synchronizing related (are they really?) businesses was trickier than the Seattle tech wizards imagined. iBuying was dumped and everything but leads and showings are underperforming.
Zillow does technology better than anyone in the real estate industry, but their integrated platform vision still seems far off.
At one time or another, I heard platform speak from eXp Realty, RE/MAX, Keller Williams, Compass, Opendoor and Redfin. All I hear are crickets on their platform ambitions today.
When raising money, a slew of proptech startups had at least one slide on building the next generation real estate platform. You know the slide — the real estate ecosystem, with the startup sitting in the center of it all in a little house. Their VCs are now giving founders the stink eye.
Profitable integration is not easy. Retail giant Sears bought Coldwell Banker many moons ago to send newly minted homeowners to their stores to buy washers and dryers. Disaster.
Realtor.com, 25 years ago, got into the moving business. Consumers never made the leap from scanning home listings to ordering a moving truck.
And the holding company formerly known as Realogy, now rebranded as Anywhere, bought a mortgage business, a tech company, a title company and a relocation firm. That amalgamation turned into a mess and the mothership was weighed down by debt to fund its ambitions.
Real estate is littered with examples like this. What looks good on a whiteboard often does not translate into reality.
In prosperous times, we feel invincible and entertain lofty aspirations.
When economic times get tough, focusing on core products and on profits, not platform building, is smarter.
