Check out Pat Kitano’s summary on the Transparent Real Estate blog of the key note speech NAR’s CTO Mark Lesswing gave at a tech fair Pat attended last week. If you’re interested in a few more details, there are a couple of slide shows from Mark’s presentations posted over at the RETS site. This slideshow download is from a presentation Mark gave a few months ago at the Clareity conference and covers some of the same topics highlighted in Pat’s summary, including a review of the RETS standards and Mark’s thoughts on making real estate web sites better lead generators by focusing on user’s intentions. Since the slides don’t do Mark’s in-person presentation justice, here’s a quote from Doc Searl’s seminal post on what he calls the “Intention Economy”:
The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them.
The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.
The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.
The Intention Economy is built around more than transactions. Conversations matter. So do relationships. So do reputation, authority and respect. Those virtues, however, are earned by sellers (as well as buyers) and not just “branded” by sellers on the minds of buyers like the symbols of ranchers burned on the hides of cattle.
The Intention Economy is about buyers finding sellers, not sellers finding (or “capturing”) buyers.
(Emphases added.) I think it’s fantastic that Mark is delving into this area as he criss-crosses the country on behalf of the NAR. Here’s an idea for Inman Connect: Mark could moderate a panel on web 2.0 lead generation, with the panelists being Greg Swann or Teri Lussier (discussing Greg’s “insanely great hyper-local weblogging strategy”), Kevin Boer of 3Oceans Real Estate (discussing the “world’s most internet-marketed property”) and Jim Duncan of RealCentralVA (discussing “hyper-local blogging success” with RealCrozetVA). I haven’t been to Inman for years, but I’d go to hear that panel.
Back to Pat Kitano’s summary, I was interested to hear that Mark has added something about “MLS gateways – combination but not merger of multiple MLS systems” (Pat’s words) to his speech. Mark also mentioned that topic in his presentation (slide show download) at the RETS meetings in Austin. I hope to learn more about that in the future.
Last Saturday, I had one of my best friends and his kids over for a barbeque with me and my kids (my wife was away on a girls weekend). I had my iPod playing music from one of those docking/portable speaker units. As diffeerent songs would come up, my friend’s son was commenting on how much he liked this or that song, which spurred some nice conversations. We talked about Johnny Cash, U2, Prince, and others. I’m 41 and he’s 14. We had a lot in common. Maybe we’re embarking on the iPod generation.
P.S. For anyone over 40 who liked music when you were younger but, like me, got sidetracked for 10 or 15 years by kids and such, I highly recommend that you go out right now and buy a music player and burn all your music to it. It will take you a day or a weekend, depending on your collection, but you’ll love having your music so accessible. It’s really a revelation to have your entire collection in such a small device that you can play in your car, in your office, or anywhere. And maybe your kids will like your music, too. 
Yesterday I did a bad thing. I was trying to raise awareness of the data standards discussions occurring on the RETS-dev list, and it didn’t go over very well. I was too general when I summarized the discussions with “those for . . .” and “those against . . . “ My intent was to set out the extreme positions succinctly for clarity to an audience unfamiliar with the details of the discussions, but what was made clear to me later is that the details are very important and broad categorizations can be offensive. As one person put it, using a blog to summarize dozens of e-mails from a discussion that has years of history is “weird” and even “righteous.” Ouch. Lesson learned.
Over on the RETS-Dev mailing list, there has been a discussion on-going about whether RETS should be trying to standardize the data or not. Those against standardizing the data say that the data is so non-standard now that if we try to standardize it, too much non-standard data will be lost in the process. Those for standardizing the data say that you have to start somewhere. Of course, this is a never-ending argument, as both things are true.
It is true that data in MLS systems too often is not validated. Some common examples mentioned in the discussion are fields like “age” that vary from a specific year to opinions like “old” and everything in between. Or a field like Approximate Square Feet that allows entries such as “HUGE” or “3000+” or other non-numeric data. These are just some of the many examples. It is tempting to say that this data should just be chucked, as, frankly, it is not very valuable. What is a “huge” house? What is an “old” house? On the other hand, there are cases where the data has some value but is just poorly structured. For example, there may be a phone number that says “123-456-7890 (call only after 5 p.m.)”. The “call only after 5 p.m.” is valid and important data but it isn’t part of a phone number. If a standard is rigidly enforced limiting data to the phone number, that data will be lost.
Also true, however, is that if we don’t start defining data standards at some point, these bad practices will simply continue. We cannot let the mistakes of the past define our future. This is not only true with regard to controlling the input on specific fields but defining a broad and deep set of fields. Many MLSs only track what they think about themselves and I think we, as MLS vendors, need to do a better job of helping our clients learn the “best practices” of the industry. We need to help our clients learn from each other, instead of having to continually oar their own ship.
But this is no easy task. First, we’re battling the adage that “the client is always right.” Second, we’re battling the truth that change is hard. Coupled together, these two forces present a strong barrier to getting new MLS clients to adopt a different way of tracking data. This is one of the reasons we’ve taken an active role in trying to establish national standards on data and that we’re insistent that the MLSs themselves be involved in this process. The client is always right and so the MLS clients need to ask for these changes. Similarly, change is less hard if done for compelling reasons, and nationwide data standards are more compelling than local standards.
Fortunately, some MLSs are already asking for data standards. There are some very large efforts on-going right now in California to merge some big data sets together. At the RETS Conference last week, Frank Tadman from REInfoLink showed us a very cool tool for comparing and linking data from the five or six MLS systems they are harmonizing in the San Francisco area. Similar efforts also are occurring in Southern California now and have been on-going for some time at large regionals like MRIS.
As important and large as these efforts are, however, we also need to recognize that these are only a few MLSs, maybe twenty or twenty-five out of 700. The other 650 or so MLSs undoubtedly have some knowledge and best practices contained in their data sets, too. We need to capture that knowledge and bring it to the table. To that end, we’ve been working on what we’re calling our “best design” at FBS, which involves the painstaking process of reviewing all 100 or so MLS meta-data structures we’ve set up to date and trying to harmonize them. This isn’t just an aggregation, effort, though. We’re also trying to refine the data into what is the best method of representing it most accurately. Our hope is that this will add to the collective knowledge and process of defining the data standards for the future.
Without a doubt, this is a transitional stage from lack of standards toward standardization. This transitional stage will be difficult and, historically, has proven to be a desert too far to cross. Not this time, though. The need is too great. We must define a path that allows the industry to move toward data standards. We need to define the standards now with MLSs so they can begin collecting better data. Until that time, we need to allow the disparate data (this house is “HUGE!”) to continue to be transported. If these two needs cannot be met simultaneously, then the need to progress with standards is more important than preserving the disparate data.
We were named a finalist for Business of the Year (that’s not the secret) by our local Chamber of Commerce and so they invited me to speak to the Chamber over breakfast last week. I used the opportunity to talk about how FBS is employee owned and how I think that really helps us a lot (this is part of the secret). Some of the advantages of employee ownership I listed were:
What’s that? No corporate income taxes? That’s right, and we’re not going to jail, either. How can this be? There are two keys. First, FBS is an S corp, which means that only the shareholders are taxed on the profits of the corporation. Second, in our case, 100% of the shares of FBS are held by the FBS ESOP (employee stock ownership plan), which, like a 401(k) plan, generally doesn’t pay income taxes. So, the S corp profits pass through to a tax exempt entity. Pretty cool, huh?
This is one case where the government has done the right thing by not only getting out of the way of a great business idea but actually encouraging it. Unless executed poorly or for the wrong reasons, putting ownership in the hands of employees is brilliant. I think this is especially true in software development companies, where dealing with incentive compensation is difficult, if not impossible. With the ESOP, we’re investing in ourselves every day, making the incentive compensation recurring and reinforcing.
A few days after I spoke to the Chamber, I received an e-mail from one of the attendees, asking if they could meet with me to learn more about the ESOP concept. That whole tax thing kind of got their attention. We met just the other day and one of the big questions for them was whether they were big enough to justify an ESOP, because they have less than twenty permanent employees. Twenty is a general rule of thumb for when an ESOP makes sense or doesn’t, because the expenses of running an ESOP are not insignificant. Though not nearly as involved as taking a company public, forming and managing an ESOP requires great legal, valuation, and administrative advisors. The expenses of these advisors can make an ESOP not advisable for a real small company. Unfortuantely, the smallest companies are often those who could benefit most from employee ownership. Business succession is one of the most challenging parts of owning your own business and employee ownership is a great answer to that challenge.
Real estate brokers and agents face this issue all the time. They build a business for years around their personal brand and then they have to figure out an exit strategy. Hopefully the broker finds a larger company interested in buying them, but that’s not always the case. Wouldn’t it be cool if an ESOP worked for real estate, too? ESOPs might seem weird for real estate, given the commission models of compensation and the independent contractor status of so many agents. On the other hand, Ebby Halliday has created an ESOP (though I don’t know if or how agents are included as it isn’t mentioned on their web site) and Keller Williams and RE/Max have some interesting models that touch on shared ownership. Also, agents certainly are entrepreneurial; they have an ownership mentality. Perhaps an ESOP real estate firm is possible? Maybe broad-based ownership focused on the long-term is just what the industry needs?
One of the reasons I love this business is getting to visit our clients. Today, I had the pleasure of driving to Alexandria, MN, to meet with their Board of Directors to discuss state-wide data sharing (more on that in a future post). Our family has a lake cabin not too far from Alexandria and so we visit there pretty frequently. Other than the really excellent people, Big Ole is one of my favorite parts of Alexandria and so I had to stop and take a picture. Enjoy.
One of the stickiest books of the year is Made to Stick by brothers Chip and Dan Heath. This book is everywhere, it seems. A great companion to that book is unstuck by Keith Yamashita and Sandra Spataro. Unstuck is a launching pad for generating new ideas and Made to Stick outlines how to communicate those ideas so they stick. Got that? Seriously, I loved both of these books and highly recommend them.
As we’ve been planning our next software release, I’ve put to use several of the ideas in unstuck, which is one of the most clever book designs I’ve seen. You can start anywhere in the book and each section will lead you to a different, though relevant, section of the book, allowing you to jump all over the place, until you’re done. It seems crazy and haphazard but it isn’t, and it’s fun. Here are some of the ideas I found useful so far:
The ideas in Made to Stick also should help us communicate some of the ideas we’ve been brainstorming for the release. The authors detail six principles for sticky ideas (SUCCESs or simple, unexpected, concrete, credible, stories), but the best bit from the book for me was the “villian” in the story, what the authors describe as the “Curse of Knowledge.”
Essentially, “[o]nce we know something, we find it hard to imagine what it was like not to know it. Our knowledge has ‘cursed’ us. And it becomes difficult for us to share our knowledge with others . . .” To illustrate this point, the authors recount the result of some research in the ’90s by Elizabeth Newton at Stanford regarding “tappers and listeners.” Basically, one person would tap out a song and the other person would listen and try to guess the song. Out of 120 tries, listeners only guessed the tune 3 times. Most interesting, though, was that before they knew the results, the people tapping out the songs predicted that the listeners would guess 50 percent of the songs. The reason is that:
“When a tapper taps, she is hearing the song in her head. . . . It’s impossible to avoid hearing the tune in your head. Meanwhile, the listeners can’t hear that tune — all they can hear is a bunch of disconnected taps, like a kind of bizarre Morse Code. . . . In the experiment, tappers are flabbergasted at how hard the listeners seem to be working to pick up the tune. Isn’t the song obvious? The tappers’ expressions, when a listener guesses “Happy Birthday to You” for the “The Star-Spangled Banner,” are priceless: How could you be so stupid? It’s hard to be a tapper. The problem is that tappers have been given knowledge (the song title) that makes it impossible for them to imagine what it’s like to lack that knowledge. When they’re tapping, they can’t imagine what it’s like for listeners to hear isolated taps rather than a song. This is the Curse of Knowledge.”
I’ve found this to be true for myself time and time again. I know what I’m trying to communicate. I’ve likely been thinking about it for years. I know the tune but I forget that no one else does. So, I’m tapping away (at the keyboard, usually) with lots of words, but I’m not doing a good enough job at communicating the core ideas. Hopefully this will change with the SUCCESs principles.
If any of you have read either of these books, I’d love to hear your thoughts about them. If not, I encourage you to check them out, especially unstuck.
We’re fortunate to have MLS clients in Blacksburg, Roanoke and the Lexington-Buena Vista-Rockbridge areas of Virginia. You all are in our thoughts and prayers as you continue healing this week.
Juxtaposition.
Those interested in MLS may find interesting Pat Kitano’s observation in Commerical Real Estate is Opaque that, “Yet without an ‘MLS’ or other real time space database, his [friend's] experience [looking for commercial real estate] was a lot like 1980’s real estate search – the agent led him around to the spaces for perusal . . .”
With so many options for search and community surrounding real estate, are we circling right back to the days of needing someone to lead us to the right places?
NAR CTO Mark Lesswing grabbed the RETS bull by the horns today to drive the process forward with deliberate speed. The RETS community voted to have Mark appoint a team to define a governance structure and process for RETS, and, wasting absolutely no time, he did just that. The team consists of Mark himself as the leader, Gregg Petch from MRIS, Peter Spicer from REInfoLink, Ryan Bonham from Transparent Technologies, Matthew McGuire from Marketlinx and, I’m honored and humbled to say, me as well. Being included by Mark with these industry leaders is a true honor and I look forward to helping however I can.
The team is charged with making recommendations for a new governance process and structure before the next RETS meeting in August so the entire community can review, discuss and vote on the proposal at that time. After that, the interim team is automatically dissolved. So, by design, this will be a short and sweet effort to streamline RETS governance and provide a path for moving forward for the long-term. Mark also wasted no time in getting some action going in the work groups, bringing to a vote selection of Gregg Larson from Clareity Consulting to lead the marketing work group. Gregg brings tons of experience and insight to this effort and has a lot of commitment and passion for the real estate industry.
In his morning presentation, Mark provided the community a glimpse into what appears to be a comprehensive vision for moving RETS forward, including ideas for making 1.x more accessible while also moving 2.0 ahead at the same time. Mark also clearly recognized the importance of RETS to the regionalization efforts on going across the country. The bottom line is that Mark has provided an awesome spark to the RETS process and it’s going to be exciting to participate in this effort.
