Technology Deflation and Real Estate Business Models

Last week, I had what was probably my fifth conversation of the week with a proptech-brokerage-disruptor startup that went something like this:

  1. Save somebody (consumers, agents, brokers, MLS) a lot of money
  2. Build a large userbase
  3. Make money from referrals to service providers (appraisers, movers, mortgage, etc.)

As a general matter, I don’t really see a big problem with this kind of a business. It is, after all, sort of what Google and Facebook do. This is roughly the stated business model for most modern brokerages as well, and most clearly articulated by Compass. So this model works.

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-rsh

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Rob Hahn

Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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