Inman events are the best way to connect, learn and grow. Don’t miss the next one, Aug. 3-5 at Inman Connect Las Vegas! Get your ticket now for the best price.
Now that brokerages are declaring themselves technology companies, tech companies are becoming brokerages, and multiple listing services are becoming tech investors, the lines between who is a tech vendor and who isn’t are blurring and causing some tension in the industry, according to panelists at Inman Connect New York on Thursday.
In a session called “Will Broker Tech Outpace MLS Software?,” panelist Lucie Fortier, vice president of product management and data at Compass, told attendees that MLS technology and broker technology shouldn’t be competing.
“They should be complementary,” she said. “Both brokers and MLSs have a really important role to play in the industry. Brokers should be really focusing on empowering their agents to be more efficient, more effective, attracting more consumers.
“MLSs really should be focused on, well, to steal the CMLS motto, ‘making the market work.’ Data aggregation, data distribution, and really that broker cooperation that brokers can’t do on their own. We really need that neutral party.”
But Greg Robertson, general manager of MLS and franchisors at Lone Wolf Technologies, said it was “a weird time to be a vendor” when some MLSs have bought vendors, others have their own homegrown MLS systems and others are now building their own tech stack.
“You’re kind of competing with your clients, right?” Robertson said. “So I want to go in there and I want to say, ‘Well, Cloud CMA is this or Cloud MLX is that,’ but there’s this undertone. Now it’s like, by me saying I want to do this and provide to your members, I’m kind of saying your baby’s ugly.”
MLSs, like brokers before them, will learn that developing tech is not easy, according to Robertson.
“The brokers have been going back and forth on this thing. The same thing is happening in the MLS world where their board of directors are afraid of ‘who’s going to acquire this company.’ So they think that they’ve got to bring everything in-house. Then the next thing you know, crap goes crazy and people can’t get access.
“It’s a hard thing to do these things. It’s not something you can kind of do part-time. The MLSs that are doing it right probably have their own divisions of those things that are separate from the MLS day-to-day.”
Fortier agreed, noting that more people in the industry are “dabbling” with tech development.
“But in order to deliver tech, especially if you want it to be solid and forward-thinking and taking you into the future, you really have to have that as part of your organizational DNA,” she said.
“You have to be able to attract the talent, you have to be able to give developers the space to come up with the solutions. I do think that … we’re going to see a separation. Running a tech company is not like running a business. It is a different skill set; it’s a completely different animal. We will see a real separation where people try and realize that it’s actually a lot harder than it looks.”
Compass, a brokerage that has positioned itself as a tech company, has a 1,000-strong product and engineering division, according to Fortier.
“It’s grown a lot, but the scale is relative to the scope of the solutions that we’re doing,” she said. “We really are trying to build that platform that is going to be the end-to-end platform for Compass agents to make them as efficient and as effective as possible.”
A company can deliver tech with just two developers, she said, but it’s not going to be a platform. And something that’s often missed is that research and development is an expense, she added.
“If you want to innovate, you really need to invest both time and money,” she said. “You have to be willing to take that risk and invest in the technology stack and the talent — which is getting a lot more expensive and a lot more competitive to really attract that talent — to be able to do proofs of concept and AB testing, and to actually fail at some of the things that you’re trying to do so you might not ever get that return.”
Those who are doing well are those who give themselves constraints, according to Robertson.
“‘It’s only going to do this,’ instead of all this feature creep,” he said. “[In terms of] number of engineers, what was the old saying? You can’t have nine women make a baby in one month, right?”
Moderator Sam DeBord, CEO of the Real Estate Standards Organization, asked whether current tech offerings were actually effectively changing the transaction significantly right now.
“We’re seeing baby steps,” Robertson said, throwing in another reference to small humans.
“At Lone Wolf, you can go from a CMA to click a button to a listing agreement and that can go on to the CRM and then that can go into the back office and the broker writes a commission check — all those things without having to retype anything. I think that’s cool. But I think we still got to go another level deeper of finding out, ‘OK, what are really the best use cases or the workflows we want to do now that we’re starting to see all the software connect?’”
DeBord noted that which vendors — whether brokers, third-party vendors or MLSs — own which part of a software stack is political in the industry, and that Compass had been working on a way to input a listing from any software platform. Fortier pointed out that “front-end of choice” — the idea that MLSs should offer agents the option of using different MLS interfaces — has been a topic of conversation in the industry for five years, but that broker platforms are not considered a front-end of choice.
“Compass would love for our platform to be recognized by the MLS as also a front-end of choice for some of their member participants,” she said.
“Part of that is being treated equally and also recognizing that as MLSs try to make things more seamless and interoperable and making their days a lot simpler so that they don’t have to log into multiple platforms, that should also happen on a broker platform because we’re all serving the same people at the end of the day.”
She said Compass had just recently launched an add/edit insert tool in New York City’s Residential Listing Service (RLS).
“Why wouldn’t we deliver that to agents so that they don’t have to manage multiple platforms in their daily work?” she said.
Robertson, whose company also offers a front-end product, Cloud MLX, said it was very hard to get agents to adopt an alternative front-end of choice because of how MLSs onboard their members, typically focusing on one MLS platform.
“They’re set up for a primary MLS,” he said. “Nobody’s really set up very much to give that parity. It’s something we’ve been working on and [are] still working on to this day.”
Fortier advised that attendees take a good look at their organizations and know their strengths when it comes to tech.
“If you ask a carpenter to build you a car, you’re probably going to get a wooden car, right?” she said. “People do what they know. And so as you go home, really … think about what is your value prop and how are you contributing to the industry. We don’t have to all own every part of it. Be really good at what you’re really good at.”
Robertson’s advice was for MLSs to “get rid of this paranoia” around tech acquisitions.
“The paranoia out there is so strong, let’s all take a deep breath,” he said. “I think the best thing you can do is give your members on the MLS side as much choice as they can, and work with your vendors to … get that education out and that training out for those types of things. I think it’s all gonna be OK.”