We sat down with Mark Weithorn, President of DPI Showcase Websites, to talk about his unique perspective as an industry leader on the status quo of real estate:
I’m a big fan of Brad Inman, whose blog I read almost every day. He built a business by staying in the loop with real estate companies and their trends, and his blog keeps track of every major player in the business. Most of all, though, I love reading the comments made by Realtors and brokers giving us glimpses into their day-to-day experiences.
Sometimes, there’s good news, like the November 2022 article about revenue rising at eXp Realty. But lately, there’s been a rash of bad news, like another article that same month about Opendoor losing nearly $1 billion in the third quarter, and Redfin Realty and Zillow’s stocks reaching all-time lows.
As the owner of a tech company that works with real estate agents, I pay close attention to articles concerning tech products. Lately the news hasn’t been great.
It’s a case of “déjà vu all over again:” a real estate broker wakes up one day with the concept that providing real estate agents with advanced technology will make them more efficient, help them follow up with clients, and result in closing more deals. They rebrand themselves, raise millions of dollars in VC money, go public, and never turn a profit. Eventually, they can no longer hide the losses; then, the layoffs begin, their stock price drops like a rock, and their future is rendered uncertain.
For a recent example, take a look at Compass Realty. Formed in 2012, Compass prided itself on providing agents with the latest in technological tools. According to Upnest.com, “Compass provides a comprehensive suite of technology tools to its agents to help better serve clients and close more deals (at a higher price point) than most agents.” As reported on Inman.com in September 2022, Compass has yet to make a profit, has let go of a sizable number of its tech staff including its Chief Technology Officer, and its stock has slid to an all-time low.
The challenge is, most real estate agents aren’t tech people. Over the past 20 years, I’ve taught marketing classes to tens of thousands of Realtors. There’s a basic theme: they exclaim, “I don’t know how to use a client database program, post on social media, organize my emails, etc.” And based on feedback from Realtors, many of their clients aren’t tech people either. Realtors often complain when their brokers charge them a monthly technology fee for programs they don’t use.
I see a disconnect between tech programmers and users. Programmers keep creating advanced features that too many average users don’t need or know how to use. What’s more, creating and maintaining tech products can be very expensive. There’s the cost of programmers, servers, and other expenses needed to maintain and upgrade these programs. Combining the lack of consumer understanding and the large expense of running a tech product yields losses.
Last April, I was a guest lecturer at the Internet 2.0 Conference in Las Vegas. The title of my talk was “The KISS Method: Keeping IT Systems Simple.” The room was full of tech people and programmers. The basic premise was, stop making technology programs complicated. Just when you get used to using a program, it changes. Then you scratch your head wondering, “What’s the benefit?” Naturally, being in a room of tech people, my message was hard to digest. Their purpose is to upgrade; prove their worth. The problem is, they aren’t thinking about how receptive non-tech users will be.
One fine example is GoDaddy. As a builder of web sites for real estate agents, we’re constantly logging into GoDaddy to change server settings. They’re constantly changing the interface. Now, every time they make a change, we have to spend an hour figuring out how to do simple tasks. One company that has pleasantly reversed course is Facebook. It started complicating the method of adding photos or videos, offering too many options that I’d guess 99% of their users didn’t know how to use, but now, they’ve simplified the process. It’s quite refreshing.
It seems many programmers fall into the same trap. They believe that average users will embrace changes when complexities are added to a program, but in reality, the opposite is true. Consumers will not use or pay for things that are too complex. Just because technology allows you to do something advanced doesn’t mean consumers will embrace it.
Then the spiral begins. A downturn in the economy, consumers cut back, tech companies keep losing money, and then layoffs. We see this in one article after another. This January, The New York Times had an article about tech layoffs in the US. As of January, more than 146,000 tech workers were laid off. The tech-heavy NASDAQ keeps losing ground.
The key is to create easy-to-use, low-cost tech products that consumers will use. At our company, DPI, we have embraced a different philosophy, the art of automation. We have created a client management system (CRM) that automates many of its tasks. This way, a real estate agent doesn’t have to sit around doing data entry. The system automatically captures the info and agents are alerted when they need to make a phone call or when a client is searching for something on their website.
The key here is automation. Make programs easy to use. Seamless. When we drive an automobile, we don’t want to worry about the mechanics of how the engine or transmission works. We want it to perform as expected. It’s the same thing with technology. Keep IT systems simple. Make sure both the user and client feel comfortable using the software to get their desired results. Most of all, tech companies need to turn a profit.
