I have been pondering something all weekend and now Greg’s post about Redfin’s layoff has changed my focus even further. Please allow me to explain:
Saturday morning: I get an email from a blogger and friend telling me to check my email. In it comes a link to this post. The post indicates that Trulia just hired some pretty heavy hitting folks to help them “connect” with MLSs and NAR. Liasons we will call them. Ah, hell…let’s just use the REAL word-grin. Lobbyists. I even posted my own editorial on the subject of the dangers of Lobbyists on my E & O page on my own real estate blog.
After muttering to myself for a couple of minutes, conversing with my blogger friend, and thinking through it, I came to TWO opinions:
1) They don’t hire a TEAM of new folks to connect with people without expecting to get a SOLID return on that investment. Especially not whilst everyone else is shrinking and laying off.
2) What is the ONLY thing that they would want to get from MLS’s and NAR, pray tell? My opinion?Listings.All of them. Texas tea to wildcatter third party types with limited funds to keep drilling prospecting wells. It is Trump for Chumps. Without it, they are just Joe Home Depots. (grin-still savoring that post, Geno) Listings are the black gold that generates traffic that generates ads that generates revenue that generates more investment as burn rates eat at bank accounts.
Am I waiting with baited breath for the flatline beeeeep of a failed bot? Nope, but I have been stewing on it a bit…and given the difficulties that Redfin (and real estate in general ) is undergoing, can the bots be far behind? Methinks not. They will bleed slower with their advertising revenue model, but they may well bleed out. Is the only reason that they are not laying off because they were the most recent VC funded startups in the real estate space to get funded, so they still have coin (for now) in the account?
I have no way of answering that, but I can predict one thing from this group of lobbyists hired to “educate” NAR and the MLS’s on seeing things the Trulia way…they are going to push hard and fast for what they need to make Trulia viable…and that would be the listings (in my opinion).
Why else would you hire a group of lobbyists other than to lobby?
Now for the tough question: Are the NAR and the MLS’s ready for the challenge and ready to stand on principle? or will they fold like Barney and Chris did to the lobbyists at Fannie and Freddie?
Another tough one: Could we be seeing the beginning of the end game for third party bots?
The lack of another round of VC capital in sight tells me “maybe”.
Thoughts?
J Boyer Summit NJ says:
I know our MLS will not think strait and will go for the quick buck every time.
October 13, 2008 — 5:37 pm
Eric Bramlett says:
It’s not about a quick buck to your local board. Trulia won’t offer money for the listings b/c that isn’t a feasible long term strategy.
This doesn’t surprise me at all, and this is a good allocation of funds on Trulia’s behalf. It won’t be a tough argument for them to convince a lot of the boards to give them the listings.
We need to mobilize on a local level. Now is the time for web savvy agents to apply for committees where they can make a difference. It’s also a great time for us to push for a better portal that we have more control over – namely, realtor.com.
October 13, 2008 — 6:23 pm
Bob says:
NAR wants Realtor.com back, but they have no ability to manage it – no labor, no technology, nothing. They need to outsource it.
Have you considered the scenario that Trulia may be offering to run Realtor.com for NAR?
October 13, 2008 — 8:39 pm
rumormonger says:
Trulia is still hiring because they were (relatively) lightly staffed until recently. Their revenue can’t fall from here, because it’s only just starting to ramp up. Plus they just closed their big round of financing.
Redfin, otoh, closed their funding a long time ago and now are faced with the harsh reality of not being able to live up to the grand promises you make the vcs. Glen predicted as much in his Guy Kawasaki blog post early this year.
If by next summer we have no sign of a turnaround, the trulia will be in the same pickle.
I’m curious about Zillow though. I heard a rumor that they had ballooned up to like 300 people but recently cut way back. One can imagine at about 60 or 80 people they can ride out a looong storm, with a decent rate of revenue and what’s left of the warchest they raised. But my guess is that they’re still at 150, which is a shame. Anyone know what the latest is with those guys?
My money is on Estately. Low cash, low overhead, just build a business the old fashioned way.
October 13, 2008 — 9:40 pm
Eric Blackwell says:
@Bramlett- There is no doubt that this could well be a good decision on Trulia’s part. Our industry is weakest at the MLS / NAR level when it comes to understanding HOW the internet works and what constitutes an opportunity and what is a threat. I agree as well that all roads lead back to R.com in this regard…
@Bob-I don’t think that is what’s at play here (although I suppose it could be…) probably more like a pitch of friendly help to the local boards to TRAIN REALTORS in the Web world in exchange for listings…funny part is, the MLS’s are NOT hurting yet. They still have the cash in most parts of the country. That will change in the next year as membership declines and THEN they will be more apt to go for outsourced help from “friends” like Trulia in exchange for a mess of pottage known as “listings”. That’d be more my guess as to the game plan.
@Rumormonger- since I don’t know who you are…let me throw out this:
1) I agree that Trulia has run leaner than Zillow (by far).
2)I think Trulia’s choice to create this “team” right now indicates that they are SERIOUS about winning the game.
3) Zillow may well be bleeding out faster, since (by all accounts I have read) their burn rate (especially labor) is much higher.
I would love to see (either here or elsewhere) a status report on how the bots are doing and what their strategies are to ride through this time….I am not holding my breath (grin) but I think something will surface soon as someone has to come up for air (money) at some point. Have ANY of the bots purported to be anywhere close to cash flow positive or even neutral yet?
Best;
Eric
October 14, 2008 — 4:02 am
Rudy from Trulia says:
Good Morning Eric!
We’ve always focused on building strategic relationships within the industry. Our goal is to demonstrate to our partners that we can help them grow their business for their clients all while improving the experience and value proposition for consumers. If we can’t prove it, then we don’t have any relationships. It’s pure and simple business development, and while we already work with a number of MLSs, we look forward to partnering with many more!
Best,
Rudy
Social Media Guru at Trulia
October 14, 2008 — 8:21 am
Bob says:
How do you define ‘partner’ with respect to an MLS? What do they get?
October 14, 2008 — 11:05 am
Rudy from Trulia says:
Hi Bob!
Here is a link to our press release which explains what benefits MLSs receive:
http://info.trulia.com/index.php?s=43&item=45
Best,
Rudy
Social Media Guru at Trulia
October 14, 2008 — 12:15 pm
Carolyn Gjerde-Tu says:
This doesn’t seem right. I also read over the weekend about trulia partnering with local associations. I do not see the long-term benefit to local associations, how will this benefit the members in the long run. It also does Not seem to be in indivual agent’s best interest to have a large non-agent company have hired guns.
October 14, 2008 — 11:16 pm
Eric Blackwell says:
Carolyn-
That is EXACTLY correct in my opinion. I do NOT believe that it is in the REALTOR’s best interest to have their board TRADE the syndication of their listings to third parties in exchange for some help at online marketing “re-education” along with other stuff like re-packaged widgets that they (TRULIA) would gladly give to agents anyway due to their SEO value.
I think they have simply found it to be a softer and more effective target to go after boards. (Was about to say there is a higher concentration of online ignorance and arrogance there-but wont…). I think the real truth is that they see what we do. Boards are soft targets. We need to harden them with our participation.
And what REALTOR.com did years ago is instructive. They PAID the boards for the listings oftentimes. This is more subtle. “We will happily provide you with tools and training (so we can tell you how good we are), and some eye candy” “Oh, us? we’re not PAYING for the listings! We wouldn’t do that!” “Hey, bud…let’s have a beer together at NAR”
“Now about those listings…”
I think it is a SMART move on their part and a dumb move on Boards that do it. They are renting online favors while giving up online ownership. All in an industry where we TEACH OWNERSHIP.
I have said it before, “every form of refuge has it’s price”. This one is high, but boards and NLS’s often get into group think mode and agree, not thinking about the future. **cough**Realtor.com 2.0**cough**
Thoughts?
October 15, 2008 — 1:20 am