I recently had the good fortune to hear Jeffrey Cohen, manager of content marketing at Salesforce’s Radian 6 Marketing Cloud, when we were both keynoting at the Social Media Strategies Summit. His presentation was solid and leaned heavily not just on data, but real data from real sources he was able to cite. This is all too rare in social media presenters.
I, of course, loved it. So when he mentioned via Twitter some recent LinkedIn changes, I took notice.
It wasn’t just the promise of learning about some new features of a digital tool that got me though. It was his assertion that the LinkedIn changes represented “another step toward information over connections.”
Hold that thought for a moment. Before looking at what this means for your real estate business, we’re going to explore how the emergence of new technology platforms complicates the task of gaining direct access to customers, and locking them in.
Stability versus direct access
In technology and maybe other aspects of life, there is a constant layering of ideas, services and products one on top of the other in a mad race to maintain a combination of stable business and direct access to the customer.
These two things — stable businesses and direct access to the customer — are probably diametrically opposed. A stable business usually would require a minimum of changes and variables leading to a high degree of predictability. Customers, on the other hand, are pretty much the definition of mercurial change and unpredictability.
For technology companies, stability often comes in the form of controlling access to a deep layer of technology. We see this in the form of vendor lock-in, for example. Lock-in can be overt, as in the requirement to use proprietary software and hardware. Lock-in can be subtle, as is the case with services that have a high “switching cost.”
To maintain the stability, the technology company needs to provide something of value that overcomes whatever lock-in is being applied.
Direct access to the customer, on the other hand, can come from following taste and fashion. Businesses and organizations that are serious about succeeding tend to foster the ability to listen and observe human behavior in order to stay ahead of the taste/fashion curve. This sort of observation leads to developing new tools and services that maintains their direct access to customers.
So we end up with a constant interplay between chasing direct access and locking it down for stability.
At a high level we can see this in the history of computing itself over the past 30 years. First there was the operating system. There was wide variation in the software, which talked directly with the hardware. A great deal of competition occurred on this theme and then settled out to being primarily Microsoft Windows, with a smattering of other also-rans.
But just as that stability was being locked in by Microsoft, the World Wide Web started capturing the attention of customers. The race was on once again, with the browser wars that began in the late 1990s. Those of us who cut our teeth coding for the Web in this era are all too familiar with the lock-in shenanigans of technology companies during this era (the remnants of which still linger more than 10 years later, in the Cro-Magnon, Explorer-only Web interfaces often employed on the backend of many multiple listing services).
With the rise of the Web, customer access at the operating system level became less important. There was less ability to lock-in customers. The effect of this is to turn much of what made for an effective operating system business into an anchor. Stability is great until there’s too much stability. Paralysis is a form of stability that isn’t desirable.
In the past five years we’ve begun to experience the rise of the social Web. Instead of the wide-open Web, customer interest and activity is tending to focus in on the sorts of things offered by social networks.
In the same way that the World Wide Web layered itself on top of the platform of the operating system, the social Web is layering itself on top of the Web. None of the lower levels of the platforms go away. They are still around in the same way that live theater continues to exist even though we have movies (or the way movie theaters are still around even though we have Netflix). Still present, but less important. The deeper levels have more stability but less direct access to customers.
In the past three years we’ve seen this layering occur in the mobile phone business. The rise of smartphones layering on top of the platform of carrier stability.
Currently we’re beginning to see a layering of data businesses over other types of businesses. Which brings me back to Jeffrey Cohen’s “information over connections.”
Information over connections
For platforms to emerge and gain enough direct customer access to apply some sort of lock-in, they typically will address some unserved need.
The current ascendent technology platform — the social Web — is focused on connections. There are friend counts and follower counts. A tithe of pixels on many websites implores people to add some sort of additional connection.
Why do we want to increase connections? As people, we want a variety of kinds of information.
Some of it is basic emotional stuff: I want people to like me, I want to fit in, I want to be part of a group so I don’t feel so alone in the world.
Some of it is more utilitarian stuff: I want to know how to accomplish a certain task; I want to hear about various options; I want to know more about the world I live in.
The point here is that “connection” is the platform layer that is currently ascendent or dominant just like the operating system once was. The thing that flows to (and from) us via connection is information.
Perhaps, in the same way that the Web was layered over the operating system, we will see a layering of information over connection.
Implications for real estate
For the people who have made it this far, through the history of technology layers and abstractness of connections and information, let’s see if we can’t tease out some direct and specific thoughts for the real estate business. For fun and enjoyment, I’ll present them as koans in bullet list form:
- If a brokerage currently thrives due to a large volume of agent connections, will this help or hinder in an environment where information is more valued?
- Will an agent who thrives due to large investments in emotional connections thrive in a world where information moves quickly?
- Are the needs of real estate consumers more readily met with connection or information?
- Given the current state of interbrokerage agreements, how much lock-in is available in a high-information environment? How much customer access is granted?
- Which groups thrive most in a high-information environment: aggregators, brokerages, agents, tech vendors, real estate consumers?
- Which groups thrive most in a high-connection environment: aggregators, brokerages, agents, tech vendors, real estate consumers?
- Are any industries operating in a post-connection environment? Are any geographies more likely to be operating in a post-connection environment?