Keller Just Keeps Missing the Point
In the world of the tech-enabled agent, the agent remains the fiduciary of the consumer experience while technology plays a functionary role. For example: a tech-enabled agent uses an MLS system so they can be at the center of the consumer experience. In the world of agent-enabled tech, software and systems are at the center of the consumer experience, while the agent plays a functionary role. — KW Blog
Two Roads Diverged in a Wood
A fiduciary is one who acts on the behalf of someone else. In Real Estate, this is obviously the agent acting on behalf of the client. Keller warns agents that technology is carving two mutually exclusive paths for agents: one where agents are enabled by technology and another where agents enable technology.
Keller is standing at the crossroads holding a sign pointing his clan down path number one, which is the correct path, but for the wrong reasons. Keller correctly states that agents who are enabled by technology are therefore still the controlling party and fiduciary, as opposed to handing over those roles and responsibilities to tech, with the extreme possibility of displacing themselves entirely from the equation.
The only question that we should really be asking is, “What’s at the end of the road?”
Right Path, Wrong Reasons
Keller is notorious for putting his agents’ interests above all else, and I don’t blame him. His clients are his agents, but his lack of see-through to the ultimate end client, home buyers and sellers, puts his brokerage at a serious disadvantage when it comes to product development and company direction.
In this industry throughout its past, technology has played a muted supporting role, likely credited in a movie as “Bartender #2” — but this is changing. Technology is starting to play a leading role within the home buying and selling process, and this is evidenced by the growth in venture funding in real estate technology to $12.6 billion in 2017, from $1.8 billion just three years prior, per Commercial Observer.
Two More Roads?
With that in mind, there are another two roads diverging: the choice to build the technology in house or use external, ‘bolt-on’ technology. National brokerages have an easier time developing broker-branded tools in-house for obvious reasons, leaving boutiques with an impossible build/buy decision because many of the tools that exist either do not serve their needs fully or, more importantly, are not designed with the home buyer or seller in mind. In an industry where the overwhelming majority of commissions are earned from repeats and referrals, technology that doesn’t enhance the client experience has critical flaws.
This is where Keller swings and misses badly. Keller is intent on developing agent-facing tools, such as Kelle, it’s AI-powered assistant, as opposed to tools that truly help consumers. Just look at the numbers of those searching for homes on Keller Williams (granted, KW.com doesn’t account for individual franchises) compared to Zillow. Of course, the argument could be made that tools that create better agents lead to a better client experience — but with the current and next generation of home buyers, demands for consumer technology, especially mobile solutions, will dwarf the importance of agent-only technologies (this is exactly why clients abandon MLS tools in nearly every case for Zillow and Redfin searching).
Zillow’s category rank in website traffic?#1. Keller’s? #159. Keller remarks how important it is for agents to retain exclusive access to client data. It’s hard to argue against that logic, but considering that Zillow likely already has the same data, and that data is then passed through multiple APIs to third-party tools and apps, flipping the picture around puts Keller at a disadvantage when it comes to it’s ability to acquire client data from other sources, something many of it’s competitors of different sizes are likely doing. Keller’s focus on hoarding client data results in its agents inability to acquire more, and this is a big disadvantage to firms that build closed systems and technology. There’s simply no way Keller can build a platform as powerful, and as quickly, as it could with third-party technology. Is Keller going to kill it’s use of the MLS and develop it’s own? Until then it can’t convinclingly argue it’s a tech shop relying entirely on proprietary technologies.
To be fair, not all third party apps have the client experience in mind, as I alluded to earlier. Take Homesnap, for example. How great is it to check in your competition to see how well they’re doing this year, or look up an agent’s contact info, and create Facebook campaigns, all in one place? How easy is it to set up saved searches for your clients, offer a broker-branded tool, and hand your clients a well-designed, intuitive search and communication tool? It’s not, because Homesnap is built for agents first, and clients second. HomeSpotter creates white-labeled mobile apps for agents and brokerages, but sports a 2.6 rating on the app store. Are you going to put that in the hands of your clients?
The Keller Lab
Back to Keller. There’s no doubt the company is trying to build a great platform for it’s agents. It’s KW Labs is facilitating it, but relying on agent input only, as opposed to consumer. Again, this is not necessarily a bad thing, but it’s an incredible missed opportunity that leaves out key stakeholders. As the largest collection of real estate salespeople in the world, Keller has an incredibly valuable asset in the amount of data it’s collected. Keller then makes the assumption that having the most data means being able to get the most out of it. Not necessarily, and this is where tech startups and others could provide exceptional value to Keller Williams.
The Future of Keller Williams
Keller’s future lies squarely on it’s ability to maintain it’s top spot in the world. Simply building a technology doesn’t make you a technology company, and with the rapid iteration and adoption of technology today, a misstep could be critical.
Keller Williams’ emphasis on training, branding, learning, and community was the genesis of it’s ascent to the world’s top, and firms that stray from areas of strength to potential areas of weakness ultimately risk failing to some degree (or in totality). A more risk-averse path would be aligning with technology experts to assemble best-in-class tools and partnerships, as opposed to jumping into the technology industry with both feet. Why establish yourself as a competitor to the 800 pound tech gorillas when you could more easily align as complementary services?
Wise leaders often reflect deeply at points like this. In his book, Only The Paranoid Survive, the late Andy Grove, former Intel CEO, describes the importance of being open-minded to a fault, and considering all ideas, no matter how crazy, as potential threats to a business. Keller strikes me as one who is looking beyond the horizon to understand where the future of his company lies, and it’s certainly a story that intertwines deeply with the development and integration of technology.
As Keller states, “Technology will protect our people. Putting technology that works in their hands is the only thing we’re focused on.” If Uber had said, “Technology will protect our drivers. Putting technology that works in our drivers' hands is the only thing we’re focused on” do you think they’d be successful? Unlikely. The value of Uber is in the incremental value-add to the riders. Same for AirBnB (hosts vs travelers), and Facebook (who is now realizing they should focus on their community, as opposed to advertising-paying companies).
To be clear, Keller Williams isn’t going anywhere — yet. But we have seen these types of decisions play out poorly in the past for companies such as Apple (who nearly exited the market because Jobs’ intense focus on creating a ‘closed’ technology, unlike Microsoft’s approach with Windows, but whose true ascent was due to it’s opening of the app store to third-party developers, among, of course, other factors), AOL (late entry into broadband connectivity), and so many others.
The Real Estate industry has historically been slow to adopt new technology, but this is now changing as consumer demands are creating a sense of urgency. Choosing the right technology, however, is critical, and Keller Williams may in fact develop world-beating technology, but it does so by carrying serious risks.
Putting the agent in a secondary role to technology is not a bad thing — in fact, it is the entire purpose of technology: allow the agent to focus on what they do best (educating, making ambiguous and complex decisions, managing emotions) and allowing technology to automate away as much of the non-value add and mundane stuff agents do. This in many cases doesmean putting technology at the forefront and moving the agent to a “secondary” role. And that is not a bad thing. This allows for a home buying and selling experience with less friction and frustrations, which ultimately benefits the clients and the agent. Keller has to get this right or it will displace itself from the industry.
The road less traveled is not always the best choice.