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Want To Disrupt An Industry? Try Actually Working In It First

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Re: Want To Disrupt An Industry? Try Actually Working In It First

#31

Post by seregine »

malandrew wrote: post #21
mijail wrote: post #16

Earlier quoted context omitted.

That's an outstanding list of problems that are all amazing start up ideas. This is where real estate can really be disrupted. These guys, http://bermanvc.com/ are really smart. They invest in real estate related technologies and even invested in YC alum 42floors.

Most real estate startups are complete and utter crap. I've used dozens of pieces of software targeted at real estate agents and I can't think of a more broken software market. It's truly shameful. Usability is among the worst you will find. This is particularly egregious since RE is filled with some of the most technically incompetent people you've ever met. Some real estate agents are fantastic and have found their…

Redfin has excellent UX, both on iOS and the web. We've been using their tools for the last three years, with consistent delight.

Re: Want To Disrupt An Industry? Try Actually Working In It First

#32

Post by itmag »

Many tech guys on HN often ask: what use are business co-founders?

Superior domain knowledge would be one thing. If I'm going to team up with a business guy, I want him to be a top notch expert in his field.

There's a tendency for tech guys to discount domain knowledge, believing that it's just a matter of "hacking something out in a weekend, after all it's just a matter of shovelling data" (I used to fall into this trap myself - now I know the value of domain expertise).

Re: Want To Disrupt An Industry? Try Actually Working In It First

#33

Post by rimantas »

pippy wrote: post #17

No. The best way to disrupt an industry is to do something unrelated - something crazy and something different. You'll never break the mould and explode by copying incumbent industries line of thought. For example the real estate industry has been upset most in New Zealand by trademe, a company started by someone who wanted an easier way to buy a used toaster. The industry here is still scrambling to catch up, instea…

Good luck solving problems you don't know. Nobody says you must copy the industry, but the knowledge is an absolute must.

Re: Want To Disrupt An Industry? Try Actually Working In It First

#34

Post by brazzy »

robrenaud wrote: post #2

To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening up a few doors really worth 3k?

I suspect a major factor is that the fee, when paid by the tenant, acts as a filter to shut out less desirable (i.e. poor) tenants and those who might not stay long. This is possible because demand vastly outstrips supply.

At least it's like that here in Germany - the broker fees for good apartments are almost always paid by tenants. Any apartment where this is not the case has probably major downsides. In other cities, where the supply/demand situation is different, broker fees are paid by the owners and the broker's added value is marketing (i.e. finding good tenants at all)

Re: Want To Disrupt An Industry? Try Actually Working In It First

#35

Post by dasil003 »

itmag wrote: post #32

Many tech guys on HN often ask: what use are business co-founders? Superior domain knowledge would be one thing. If I'm going to team up with a business guy, I want him to be a top notch expert in his field. There's a tendency for tech guys to discount domain knowledge, believing that it's just a matter of "hacking something out in a weekend, after all it's just a matter of shovelling data" (I used to fall into this…

Domain knowledge is money-printing sauce in so many industries.

I think the reason young hackers often dismiss domain experts is because they associate the idea of domain knowledge with old people who don't get tech. It's true that most old business people don't understand technology, but it's also true that most young hackers have no clue how to make money.

Now if you can combine domain knowledge with the ability to recognize the potential, and have a realistic vision for the novel application of technology, then you have gold. It might not be the most grandiose idea, but it's 3 or 4 orders of magnitude more reliable than trying to be the next Google or Facebook.

Re: Want To Disrupt An Industry? Try Actually Working In It First

#36

Post by crucialfelix »

brazzy wrote: post #34
robrenaud wrote: post #2

To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening up a few doors really worth 3k?

I suspect a major factor is that the fee, when paid by the tenant, acts as a filter to shut out less desirable (i.e. poor) tenants and those who might not stay long. This is possible because demand vastly outstrips supply. At least it's like that here in Germany - the broker fees for good apartments are almost always paid by tenants. Any apartment where this is not the case has probably major downsides. In other citi…

broker/makler fees in Berlin are usually paid by the owner as far as I have found. this may change now that demand is so much higher than supply. it certainly wasn't like this 5 years ago.

Re: Want To Disrupt An Industry? Try Actually Working In It First

#37

Post by crucialfelix »

mijail wrote: post #8

New York real estate is a system. You have to learn the system to hack it. A lot of real estate start ups are trying to "Avoid the Broker." The system isn't as broken as we may think. Landlords enjoy minimal vacancy. Brokers get paid generously. Tenants find apartments. Complaining about a 15% broker fee is like complaining about the gas for your Lamborghini.

more significantly, the major NY brokerages have managed to keep a real MLS from forming. every other US market has multiple listing service, but in the city its been killed and any attempts (like VOW) have been effectively squashed. this is for sales. rentals are small change in comparison.

Re: Want To Disrupt An Industry? Try Actually Working In It First

#38

Post by philipdlang »

infinii wrote: post #22
philipdlang wrote: post #9

Earlier quoted context omitted.

Brokers are compensated for their market knowledge, not just opening doors. The fast that he was "in" with the management company is hugely valuable, and you were able to take advantage of that. 15% is a lot of money, but brokers meet tens of clients each week that don't rent with them, so they are compensated for that low hit rate as well. And yes, many apartments are exclusive so you have to pay a full 15% fee (spl…

What market knowledge are you talking about specifically? I haven't met many brokers who wouldn't sell/rent you a place because they felt it wasn't worth it. Your argument that the 15% broker fee is to make up for a "low hit rate" is pathetic. Many people working in retail see just as many clients with low hit rates, yet they don't make exorbitant six figure salaries.

Market knowledge is gained by hitting the streets and knowing which buildings are decent deals. 50% of the time, the renter has a special situation - bad credit, international, needs a guarantor, etc and brokers have to know the buildings and which are flexible. When you go to a broker and tell them you are looking for a $3500 Convertible 2 bed in Murray Hill, they are going to rattle off 5 buildings that have availability. If everybody could do that, there wouldn't be a market for brokers (see lawyers, consultants and just about any other service industry for a comparable).

Most brokers don't make exorbitant six figure salaries, which is why the turnover in the industry is close to 80%. In fact, most make about $40k and leave the industry soon after they enter. Only the top 5% of brokers in NYC are making six figures. Brokers are certainly compensated for the low hit rate, just as bankers are as well. This may be a controversial comparison, but in both industries the professionals work on a success-based transaction fee with a very low probability of success.

Re: Want To Disrupt An Industry? Try Actually Working In It First

#39

Post by brazzy »

crucialfelix wrote: post #36
brazzy wrote: post #34

Earlier quoted context omitted.

I suspect a major factor is that the fee, when paid by the tenant, acts as a filter to shut out less desirable (i.e. poor) tenants and those who might not stay long. This is possible because demand vastly outstrips supply. At least it's like that here in Germany - the broker fees for good apartments are almost always paid by tenants. Any apartment where this is not the case has probably major downsides. In other citi…

broker/makler fees in Berlin are usually paid by the owner as far as I have found. this may change now that demand is so much higher than supply. it certainly wasn't like this 5 years ago.

Yes, Berlin still has (or at least recently had) an oversupply of living space. Look at Hamburg or Munich, and you'll see that nearly every listed apartment has the broker's fee of 2.38 monthly rents (legal maximum) payable by the tenant.

Re: Want To Disrupt An Industry? Try Actually Working In It First

#40

Post by syedkarim »

malandrew wrote: post #13
robrenaud wrote: post #2

To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening up a few doors really worth 3k?

My mother is a real estate agent and worked in both NY (westchester county) and NC (raleigh) and I grew up helping my mother with myriad activities necessary to list and sell a house You'd be surprised how much work is required to keep the real estate market liquid. I'd say half the work is necessary, some automatable, some not so much. However, a lot of the work doesn't even have much to do with work necessary every…

Most of the work that you are referring to pertains to real estate sales. I believe the original comment regarding the $3K and NYC brokers has to do with leasing agents/rental brokers.

I was a leasing agent before; there's really nothing to the job.

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