Why Real Estate Tech is So Unattractive for Founders
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Why Real Estate Tech is So Unattractive for Founders
1–10 of 17 posts
Re: Why Real Estate Tech is So Unattractive for Founders
#2One of the main problems with so many companies selling to agents (most of whom don't know how to effectively use the tech they are paying for) is that the increased spending of agents only solidifies higher broker fees for the average home buyer...
Re: Why Real Estate Tech is So Unattractive for Founders
#3I would definitely use a "Rent it" button
Re: Why Real Estate Tech is So Unattractive for Founders
#4I would definitely use a "Rent it" button
Interesting - at what price point do you think people would need to see it in person first? Certainly some sites have proven people will buy ever-more-expensive goods online, but real estate hasn't gotten there yet...
Re: Why Real Estate Tech is So Unattractive for Founders
#5Preface: I work at Househappy.org a real estate start-up seeking to simplify the search experience.
I completely agree with the article. I read the one posted last week and sort of chuckled (asking where the start ups are) because it's not the technology that's the problem, it's the industry and the market itself... Why?
As the author states, brokers live and die by their commission (my father happens to be one as well), and trying to get them to adopt a new technology can be harder than pulling teeth... And in a lot of ways it's completely fair! Not many tools actually do anything that improve ROI, if anything they're time and money pits.
Furthermore, Realtors don't often trust people who aren't because they don't "get" the problems they're facing. Our CEO is a broker of 27 years, and I will say, without his insight into the industry we would be missing a big portion of the problems they face. Engineering isn't the hard part, problem recognition is...
Real Estate is really for people already in the industry who are aware of what problem's its facing. Its extremely hard to get any footing with no experience. Plus, why bother now that Househappy is out and about anyway ;-) (sorry, can't help but shamelessly plug one last time-- we're also hiring!)
Re: Why Real Estate Tech is So Unattractive for Founders
#6The housing industry in general is at least a decade back from any other industry because of regulation. I work in the apartment industry and can concur that tech could improve it 10 fold. However; this sector along with the industry has an old mindset and are against change.
Re: Why Real Estate Tech is So Unattractive for Founders
#7The housing industry in general is at least a decade back from any other industry because of regulation. I work in the apartment industry and can concur that tech could improve it 10 fold. However; this sector along with the industry has an old mindset and are against change.
I totally agree. It's not that new tools need to be made for the existing brokers, but new companies need to completely redefine what a "real estate agent" looks like and does. Only then will then will regulation come close to catching up with most industries.
Re: Why Real Estate Tech is So Unattractive for Founders
#8Preface: I work at Househappy.org a real estate start-up seeking to simplify the search experience. I completely agree with the article. I read the one posted last week and sort of chuckled (asking where the start ups are) because it's not the technology that's the problem, it's the industry and the market itself... Why? As the author states, brokers live and die by their commission (my father happens to be one as we…
There is definitely a strong argument for the value of experience when disrupting an old industry. The main reason real estate has thwarted off technology for so long is that regulation and entrenched practices are set up to keep super-disruptive technology at bay.
This is why I think it is going to take a company with both human agents and software developers to make any real change. It has to be disrupted from the inside out, making experience all the more important.
Re: Why Real Estate Tech is So Unattractive for Founders
#9I would definitely use a "Rent it" button
Interesting - at what price point do you think people would need to see it in person first? Certainly some sites have proven people will buy ever-more-expensive goods online, but real estate hasn't gotten there yet...
It's not just the price point (though if I'm going to spend $200,000 buying it, I'm sure going to see it first, including the inside).
It's also that I'm going to have to live in this environment. That noisy neighbor? The web site isn't going to tell me about that. It isn't going to tell me about the gang sign on the building across the street (I know, Google Street View). It isn't going to tell me about the feel of the neighborhood - whether, at gut level, I'm going to feel comfortable having my wife and kids live there. There's simply no way I'm going to make a decision about living somewhere without physically going there first. It's not like renting a hotel room for a night.
Re: Why Real Estate Tech is So Unattractive for Founders
#10Preface: I work at Househappy.org a real estate start-up seeking to simplify the search experience. I completely agree with the article. I read the one posted last week and sort of chuckled (asking where the start ups are) because it's not the technology that's the problem, it's the industry and the market itself... Why? As the author states, brokers live and die by their commission (my father happens to be one as we…
Good on you for having a CEO with real-world experience in your field. :) That makes all the difference.
So if your target market is the brokers, the trick is providing value to them. That means more commissions, or more profit per commission. There might be a market for painkillers and making it less stressful, but that will be a much smaller market than getting a piece of that commission cash flow.
And for pricing, either you charge a LOT for service, or you get paid per commission as a percentage, which puts you in the land of state-by-state regulatory and is hard.
To me, this feels a lot more like the enterprise software market than the consumer app markets that seem to attract so many startups. I keep seeing people talk about a B2C approach, and I just don't see how you make a lot of money at that.