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I Am The CEO Of CO-STAR

beachumbrella

So I sit here on the beach with a little something cool to drink and think to myself what if I were the Ceo of Co-Star?(In case you are wondering? I am not the Ceo of Co-Star.) If I sat in the big boy chair what might go thru my mind? I have a big company that just made an offer for another big company.Will we merge and create that wonderful business synergy that will make us all billions? The sun is getting a little low in the sky so let’s take a fictional ride down the commercial real estate data super highway.

Turn Loopnet off.  The 20 page dissertations about why are irrelevant. Simple, it’s makes us the only player.

Encourage aggregators. The cost time and effort it takes to launch grow and maintain will discourage the major players and they will turn to us.

Back off the” brokers are our competition” statement and fire the PR idiot who told me to say that on TV. If they do decide to get together…?

Raise prices quietly.

Limit access to data, specifically access to data outside a clients “home” market.

Limit access to data outside the clients own office. Wait we already do that. Charge more.

We are going to lower fees, we are going to add more users,we are going to increase more information,we will make more money and then they we will hire more people which will provide a better service. Raising fees,will make everone quit the service. We won’t do that.. Make sure we tell everyone that,especially the brokers!

The question is…Who is our customer? The millions of internet users that want to buy, sell, and lease commercial real estate, some of them need help understanding the market and some don’t, and until recently this information was not easily accessible on a national level. Now we have it all. So yes, now we have millions of potential customers. The consumer.

The incentives for brokers to keep giving us their data and listings will be? It’s what keeps us in business.

Shhhhh, the contracts we have in place now. Let them wind down and then negotiate better terms for us. That’s technically not raising prices.

The Loopnet Comps History we just bought. Remember to thank the “little” brokers for giving us the stuff they thought we could never get…and use against them.

Make sure that everyone knows that everyone else (competitors) are all signed up with us. They are aren’t they?

How do we keep the costs of data and the transaction high? Simple and cheap kills our business model.

If we turn the data and transaction into a commodity we are doomed. Shhh don’t let that one out.

If we create a set of secondary data can we create a new class of commercial real estate based just on performance of that data?

We are really only 30% of the market. Wait is it a real market if we are only 30% of it? Our investors and stockholders need to think so. We need to grow the “market.”

The commercial real estate industry would operate much better and be more efficient if all brokers pledged to cooperate with information and to serve clients by sharing market information. They can’t won’t or don’t therefore we serve that market and make MILLIONS.

Transparency. Embrace that word embrace that concept. Yes it will change the commercial real estate market for the better. It will create a better system a better market and a better economy. The data and access to that data for commercial real estate market transparency can be and will be available to everyone for a price from us.

Google.(Is Google just a canvas?) Google has no interest in the commercial data space…surely they have more monster data markets that they can dominate. What’s a few billion to Google? Are they not more worried about Facebook, Microsoft ,Amazon, Cisco? Why worry about little old commercial real estate? Sure they have all the same data sources and research. But that “we are a canvas for the world” strategy does not relate the commercial real estate….or does it? The mapping, the geo-location, the 3-D, the algorithms, just to name a few are just simple toys for geeky programmers. That means nothing to our clients. We hope!

Debt.How about a little debt? Is the war chest looking a little worse for wear? What debt is “good” debt? Raising the prices and eliminating what services? We have to get rid of something to shave the fat right? How much will that turn those “ clients’ or “client relationships” to ZERO…. along with the revenue. Customer service. Yes, let’s go ahead and hang our hat on that!

Well it is getting late. The beach attendant is starting to collapse the chairs and umbrellas. Time to think about dinner… fresh fish of course. I may have few more ideas or thoughts but we have a little more time before the” big deal” itself is actually official. Lot’s of speculation and talk have taken place already.  If you were the real Ceo of Co-Star why not lay low and plan the transition and strategy.I would….all the way to the bank? Thoughts?

 

Photo Credit:http://www.flickr.com/photos/merfam/

 

 

 

 

 

 

 

 

 

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  • Since it would take up too much space to say what I’d do if I were Costar’s CEO, I’ll just have to write a post about it!

    As always, a very interesting post.

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  • Thanks for helping to keep the CoStar-LoopNet talks in the forefront, Duke! Same to you, Chris, for addressing it in your most recent post. I’m not sure how closely these CRE research/marketing giants are following consumer (broker, owner, developer, research staff) sentiment, but they should.

    As a website guy and mapping geek, my interest is mostly limited to what product the eventual entity will offer as a website listings feed/API or featured property(ies) feed/API. Additionally, How will that website feed/API depict location? It’s possible that everyone will ‘play nice’ together and produce some amazing new property-specific marketing options that take full advantage of the Google Maps/Earth API to showcase properties/portfolios on individual websites.

    Keep up the great discussion – and keep your fingers crossed.

    – Dave

  • Eileen Burns

    Duke
    I just had this same conversation at my Mastermind gathering about accurate data presented in the commercial real estate arena. More specifically, where to go for source of data.

    It seems to me history is repeating itself once again. We must subscribe to multiple locations to obtain current data on what is being sold, how it is being marketed and who actually provides vlaue to our industry.

    Enjoy your philosophy and would certainly subscribe!

  • Nadina Cole-Potter Phoenix

    Duke — Sounds like you don’t have much faith in the CoStar CEO’s assuming an attitude of what is good for the industry — its customers and potential customers — rather than how CoStar can continue to gouge the industry by selling a la carte subscriptions and leave smaller players out. My assessment exactly.

    Chris Clark — Please post the URL of your blog. Thanks.

  • Lowell

    Bingo..

  • Rocky Mackintosh

    Duke, Great post …. simply put, CoStar has had its head up its ars for a long time … started for the big broker houses and has snubbed its nose at the smaller shops for years. Locally I battled with their DC office for several months and got them to drop their rates considerably, but even with that I still wasn’t happy. So chose to boycott … a year later knocking at my door again … hmmm

  • Food for thought, maybe drink is more appropriate ! Wish I was sipping some of Duke’s Kool Aid as well. It’s a great beach day here in Boca.

    I don’t see Costar spending 9 figures to buy Loopnet just to tear it down. Leave that kind on nonsense to the ex-Mrs.Tiger Woods. I see Loopnet emerging at the Chevrolet to CoStar’s Cadillac – lower cost without some of the bells and whistles.

    I think that the 800 pound Gorilla should be on the lookout for the smaller nimbler upstarts like eProperty Data, which seems to be making inroads in our market. (Shameless Self –Promotion: see my prior ”Chicken Suit” article http://www.danburg.com/?p=2297 which was inspired by Duke’s “I Tear the 800 Pound Gorilla A New One”) I don’t see the C&W’s CBREs and JLLs bringing research back in-house like we did it when I started in the business; so I don’t see CoStar going anywhere. I also don’t think that CoStar is out to eliminate the middleman in the same way that WebMd will not wipe out the medical profession.

    I’ll be here on the sidelines watching the situation develop and hoping to add some insightful yet entertaining commentary. Keep up the good work Duke !

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  • A crazy market, one that is diverse (land,building,retail,industrial,etc.), covers the country, and has big to small players is a difficult one to manage on a large scale. With all the “chaos” and noise, the market screams out for individuals to cut through the BS. In my mind CoStar is contributing to the “noise” factor. Those of us who can figure out how to navigate the technology maze, provide high levels of service, and provide good old fashioned advice, might come out ahead here.

    I hope CoStar contributes some more noise. CRE is still mostly “local”, and a bigger service won’t provide that….

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