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Are We Now Creating Companies That Are Just As Shitty As The One’s They Are Replacing?

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Are We Now Creating Companies That Are Just As Shitty As The One’s They Are Replacing?

What would your answer be to that question?

Not enough information about the #CRETech companies out there to make an informed decision?

Waiting it out to see who has the $$$ and staying power to make a significant impact on the marketplace?

Not any companies shaking the earth and or your backyard to make you pay any attention?

If you said yes to any or all above I say “fair enough.”

Maybe you and I know something most of the rest of the world does not know yet.

We need better companies.

Better companies with better products.

I wouldn’t worry too much about the existing companies getting upset at you and or I for calling it like it is.

THEY KNOW!

At least I hope they know.

They all want to be “that” company.

There are thousands of people working and millions …wait….billions of dollars being spent to be just “that company.”

I know most of, all of, pretty much everyone and then some running these companies.

What they are trying to do is not in principle and or theory that hard.

The problem they are struggling with is applying those principles and theories to our specific industry.

Let me help you understand.

Part of the issue is trying to create the “network effect.”

The network effect forces an incumbent company into an accelerating decline while the up and coming company takes over their position in the marketplace.

Now there have been thousand upon thousand of articles, podcasts, tweets, white papers and posts created about the actual execution it would take to make this happen.

To simplify a company creates a product and you then derive value from the use of that product.

With the network effect in use, you derive value not only from your use of a product but also other people’s use of the same product.

So far in #CRETech we have seen the emergence of two types companies.

The first is type is the Marketplace company. It can be easily identified as a place where money transacts for a specific service.

These types of platforms are very much embedded in the legacy of commercial real estate technology. A prime example is The DarkStar and it’s various Sith Lords. Commonly known as amoral, sadistic, vindictive and violent. (Look it up.)

The second is the Platform company. The platform company uses multi-sided feedback loop that helps create value for the groups of users developers and the platform itself. A prime example would be Airbnb.

They took a simple idea. Not enough hotel rooms to accommodate convention attendees.

And turned it into space for everyone in the world to stay. Using every available space.

If you look at it from a commercial real estate perspective what they actually did was create more inventory for people to stay which created more demand for space. They also created a way for anyone to make money from their existing space.

Along with that, they created a way for the potential host to make their “space more ” appealing by offering professional photography. Hmmm, better pictures owned by who? The owner? I wonder if they like to sue? Just for fun!

They also created community connectivity to create trust in the marketplace. Creating trust to make money. What a novel concept in #CRE. How much is the company you work for worth?

This just did not happen for them overnight. It took time. Airbnb has been around since August 2008.

The basics of the Airbnb platform success are simple. Inventory or demand trust and safety.

They created inventory and along with that demand.

They also created trust and safety.

Mix all that together with patience and you get a market valuation of $25 Billion. (Yea, I know it sounds crazy)

How about this recent headline?

“Airbnb Is Thriving. Hotels Are Thriving.” “How is that possible?”

When you read that, it seems so simple. And yet are you confused?

How about this?

How much does the product or service such as Airbnb increase the value of the data they have in their platform?

Think about the #CRETech platforms out there now. Who is doing the best job at this so far? Hard to tell at this point.

This is THEIR BIG VALE ADD…….AND THEY KNOW IT!

But there is another interesting component that can be added and that is how much data does the platform accumulate over that same period?

Think deep about that one. (Hint: It comes from where again?)

So The Network Effect can….

Add more value to users the more people use it.

It can and will attract more deals, which in turns attracts more users who then create more availability which attracts more users.

That’s all Air BnB figured out. Way ahead of you and many others I might add.

I’m not saying ALL of the #CRETech companies are trying to do this.

Hell, I know some of them are copying this link right now just to understand what in the hell they are doing.

BUT!

Are We Now Creating Companies That Are Just As Shitty As The One’s They Are Replacing?

Not if I have anything to do with it!

 

 

 

+1 I am just trying to grow the entire technology market for #CRE.

+1+1 Market transparency = Better market for all.

 

 

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