Wisest of the crowds
- solving problems one market at a time
Munching through the ecosytem
By karim May 11, 2007
Trulia took a big step into socializing camp by creating a Q&A platform with the help of Pat Kitano. Very sharp looking implementation that now solidly takes Trulia from exclusively broker centric to also being agent centric. The list of reviews worth reading follows: Pat Kitano, StartupSquad, TechCrunch, Joel Burslem, Greg Swann.
Trulia’s implementation is clean and certainly ups the feature ante but is basically catch-up with others including Zillow and My-Currency. User generated content is interesting and valuable but is this going to turn into some sort of vertical social networking war where winner takes all? The audience of home shoppers currently is much older and much more tech phobic than what you might see at typical social networks so what the hell are we all doing? Is this web2.0 hipsters flexing, an investment in future behavior by home buyers & sellers, or part of some master plan to disintermediate the existing ecosystems? All three isnt a bad guess.
For a while I have been wondering which direction Trulia would point their ship - towards the incumbents or away?. It feels to me like listings are a commodity waiting to happen and so the question for listings aggregators, like Trulia, is what next? Going social gets them on plan to taking Zillow head-on without alienating their existing constituents. Zillow has ignored the brokers while Trulia has made them their buddies. Each has their natural advantages and disadvantages but Trulia’s is a safer and more optionable route. Only if you raise a bunch of money can you take the path Zillow is taking. The payoff for Zillow, however, is much bigger with the risk because the consumers are the customers and Zillow does this very well. The real estate industry will never go back and the question I have as an entrepreneur is which strategy will win? One that eats its way through the ecosystem (Trulia) or one that completely goes around it (Zillow)?View blog reactions
Tags
agents, avm, competition, consumers, home values, housing, housing analysis, housing data, housing vacancy, my-currency, real estate, social media, startups, trulia, values, zillow
Comments
Christian Sterner says
7:25 pm, May 11, 2007
Solid questions being asked here. In the end, the winner is the site that demonstrates itself as the place with the most buyer traffic (the chicken), which lends itself to the site with the most listings (egg) and best search interface.
louis Cammarosano says
3:26 pm, May 12, 2007
Christian
I agree 100% with your point-
And HomeGain has more buyer traffic than Zillow and Trulia COMBINED.
HomeGain also has an automated valuation tool-it created the first in the last millenium and recently brought it back a couple of weeks ago.
Here is a blog thread that shows why HomeGain beats Zillow
http://www.futureofrealestatemarketing.com/why-homegain-beats-zillow
haroldt says
9:30 pm, May 12, 2007
So everyone has an answers platform. What does that mean for agents? They need to do triple the work (My-Currency, Zillow, Trulia) to get noticed?
louis Cammarosano says
11:39 am, May 13, 2007
Haroldt
I think you are right. With companies like zillow encouraging FSBO listings and sites promoting alternative listings postings like Google Base and Craig’s list, the MLS is no longer the only place for listings.
This means that consumers no longer only look on the MLS so realtors are also posting listings in these places.
To me the biggest issue is not where the listings are but the role of the realtor in the real estate transaction.
Site like zillow aim to “empower the consumer” Many realtors have complained that consumers are so enamored with their “zestimates” that they refuse to believe that their homes are not worth what the zestimate claims them to be.
In many instances it creates the perception that the consumer knows more about the local market and selling homes than the professional realtor.
There is nothing wrong with a little free information to help consumers, but Zillow tries to give the impression that the information they are providing is very accurate.
HomeGain also has a free homevaluation tool (the first created back in 1999! and recently relaunched)-but we provide an estimated range and encourage the user to contact a realtor.
Karim can I add to your question: “the question I have as an entrepreneur is which strategy will win? One that eats its way through the ecosystem (Trulia) or one that completely goes around it (Zillow)? or one that works with it to improve it for the existing inhabitants (HomeGain)?
karim says
2:14 pm, May 13, 2007
Thanks for the really excellent comments.
Christian, yes I agree that sites with traffic will get listings but what if the sites have open api’s like google? Google is already getting a large percentage and is likely to get more as firms get converted to modern thinking. Listings are commodity in the making - as they should be.
Haroldt, the short answer is “yes” in the short-term and “no” in the long-term. Its like listings, you should expose them to as many people as possible to get the best outcomes. Ultimately all these platforms will be deconstructed for you to interact with seemlessly (this is a few years out) - a sort widgetization of content and platforms.
Marc, really great points! Thanks for adding to my “question”. I didn’t mean to imply that Zillow & Trulia aren’t doing good things for the industry. Both have created, for example, mechanisms for agents to build “reputation currency” with consumers - much like homegain and my-currency. I was really talking about their long-term plans. Trulia is integrating itself with the industry much more than Zillow. Zillow is, essentially getting cozy with consumers. Consumers are the asset and Zillow has gone for them directly - a high risk, high reward strategy. Trulia is using the industry as a channel to get to consumers. They may both have the same goals but Trulia’s is a safer but ultimately more encumbered strategy than Zillow’s.
You raise another good point - what are the original innovators, like HomeGain, doing in light of all these developments? I will need some time to research and address this thread ;-). Thanks again!
louis Cammarosano says
2:28 pm, May 13, 2007
Hi Karim
As the General Manager of Homegain I can tell you a few things that HG is doing:
-focusing on delivering value to its thousands of real estate agents
-leveraging our million plus registered consumers and approximately five million unique visitors a month
-improving our user interface, instant homevaluation tool and free listings tool
-and of course like Realtor.com-we have a few tricks up our sleeve that we not yet divulging.
For all the buzz that Zillow and to a lesser extent, Trulia have created, most likely neither are profitable and probably have negligible revenues.
Is the plan for both of them to garner sufficient 1999 metrics like eyeballs, listings, number of blog mentions or some other non financial metrics and then either try to go public or get sold?
I hope the VC’s that invested in these companies know the answer.
I would dare say based on publically available information, Homegain is the only profitable online real estate company.
karim says
2:59 pm, May 13, 2007
Hi Louis,
Thanks again for the comments. I am sure Zillow & Trulia are both losing money at the moment but I feel confident that they are pursuing real business plans with real financial metrics. Although Silicon Valley is full of companies that aren’t sure of their business plan, I don’t think these guys are them. I have met some of the same investors that are behind Zillow & Trulia and I promise you they aren’t stupid or naive. What they are is risk takers looking for very large returns (that exceed their risk) from an aggressive business plan executed by brilliant entrepreneurs. Don’t count them out because it isn’t obvious yet what they are pursuing. You said, “we have a few tricks up our sleeve that we are not yet divulging”. Couldn’t the same be true of Zillow & Trulia? Its certainly true for My-Currency. Having said that, I am sure life MUCH better for you than me. Can you spare a server or two?