The next technology unicorn, an actual #BigTech #networkeffects unicorn, is an #Internet company built as an Open Marketplace. Such platform must eventually operate as a standalone, in union and irrespective of all #BigFive channels we all use today. This machine has to compile an immense amount of data, work in a massive set of vertical markets, and it is pretty much required to create an immense impact. The residential real estate industry is a perfect use case for something like that, hence #PropTech is now a term. Yes, I am discounting @WeWork model here and a lot of other #PropTech solutions, but @WeWork is not a marketplace.
#Marketplaces is the next technology frontier. 2019 The Marketplace Conference in San Francisco did not see the majority of marketplaces that operate right now, in fact, only a fraction of all marketplaces have attended. Yet, most of them were there in stealth, specifically two of the #BigFive — @Facebook and @Alphabet. @Amazon is too busy building another referral network and I have no idea what @Microsoft and @Apple are doing — standing still?
The two of the #BigFive must know, or at least starting to suspect, that an Open Marketplace will #disrupt everything we know, love, and hate about #paytoplay on the Internet. This process is as natural and difficult, but it is already taking place in many technology sectors across, mainly the US and Europe. @Alphabet has certainly caught on to it in the travel sector by going after the rake on OTAs (Online Travel Agencies.) I think that the action taken by the EU on #priceparity clauses was the moving factor. @Facebook is building a great marketplace as well, placing its left toe into #homeownership experience. A major obstacle to reaching the true power of these milestones is an online referral practice built on price fixing. Price fixing must become an old technology for any of this to start making sense. All #BigFive know this, but they all act on this information differently.
To build an effective #marketplace is not a nice-to-have problem. Big problems, such as the affordable housing crisis can greatly benefit from the power of network effects. The real estate industry, as it stands today, is built on a “two-star” experiences and hidden fees. This is an irresponsible way to manage our homes. As people, we tend to like our homes, we tend to like privacy, we tend to like affordability, and we tend to like genuine savings. To #disrupt anti-competitive practices in residential real estate requires a focused attack at the weakest point — lack of excellent user experience, excessive fees, and poor quality. Such an attack is only possible due to network effects.
If the answer to affordable housing is indeed an iBuyer, such as @Zillow Offers or an @Opendoor that business model has been unable to deliver the user experience it has promised. Something that systematically operates on a 2% success rate, and covers 0.02% of the entire homes market seems like a failed approach. Unlike home-flipping, an Open Marketplace helps stabilize unsustainable cycles in the real estate market, lowers risk-aversion, cuts down on fees, and makes the competition an ideal vehicle to deliver savings. This massive technological solution can be successfully leveraged with competitive savings and network effects in a properly designed marketplace.
The questions that have no easy answers are the ones that end up being answered by building a better user experience. The basis for building a better product is 1. The potential impact 2. The potential ROI. I find it fascinating that four of the #BigFive have raised money responsibly, preserving their ability to deliver this highly elusive combination. At the Marketplace Conference, I thought: “I wonder, how many more marketplaces will come here next year?” That answer will always be different because users only love amazing marketplaces.
Suddenly, it matters how something is bought and managed, simply by being able to improve the way it is bought and managed. Go build an amazing marketplace, go disrupt pay-to-play, go add transparency, Open Marketplace is the next technology unicorn, it is an ever unreachable target.
#affordablehousing #iBuyer #flatfees #homeselling #homebuying #pricefixing #antitrust #BigTech #opensystems #privacybydesign #openmarketplace #UX