Last year, we announced our $ 1 billion investment to develop new technology products and services as part of our overarching plan to transform into a technology company. Why? As you’re all well aware, the real estate industry is at a critical disruptive moment.
It’s no secret that venture capital firms are spending billions to upend the real estate industry by investing in technology designed to create more efficiencies and conveniences in the home-buying process.
That’s not a bad thing, but without an agent’s involvement in this technology, investors will never see a return on that money. All industries have to adapt in our increasingly digital-based economy or risk becoming irrelevant. Traditional VC firms and strategic investors place bets on companies they feel have the ability to disrupt an industry. However, my colleagues in this field have once again forgotten the fundamentals of disruption. Technology alone will not solve for customer behavior, human emotion, fear of loss, and simple unit economics.
We have an alternative thesis at Keller Williams. Even as we have transformed into a technology company, we have proven that the agents’ experience and customer service remain valuable to home buyers and sellers. The reason consumers will continue to rely on a licensed agent is because buying and selling a home is not a regular habit. This professional’s advice will guide them through a confusing and intimidating process.
The same is true in other industries – doctors still treat patients, lawyers still argue court cases, and real estate agents will continue to help people buy and sell homes. Technology has improved these professionals’ ability to do their jobs, but it has not replaced them. If you are an individual investor or an institutional fund making investments in technology that intends to significantly reduce or replace the role of the agent, you are throwing your money away.
In the next two years, we will ensure that KW agents become “super agents” powered by using one platform to manage the entire home-buying experience.
From accessing listings and scheduling showings to financing, home repairs and more, agents and consumers will soon be able to efficiently coordinate and manage it all with our app.
In order to make this vision a reality, we are creating our own proprietary technology platforms like the AI-enabled Keller Cloud and Kelle app. We are also acquiring companies with unique tech products and services that deliver speed to market. Lastly, we are adding talent to our best-in-class team.
This approach is summed up in the question we ask ourselves every day: “How do we provide more value around the agent?”
Speeding toward the future
While every real estate company is racing to develop the home-buying platform of the future, we already have the upper hand.
We’ve recently invested more than $ 177 million to build our own technology platforms, and are now speeding up the development process by actively identifying and acquiring products and services that align with our agent-centric vision.
Our criteria for acquisitions is simple. If it’s faster and cheaper to buy than build a specific product or service, mold it to fit agent needs, and make it available for use as quickly as possible, then we pursue an acquisition. This strategy also allows us to engage top talent from selected companies to help us continually evolve the agent experience.
After evaluating more than 200 firms over the last 18 months, we recently completed a series of acquisitions. This immediately broadened our bench of technologists, adding 73 developers, engineers, and data scientists. Inman was first to break the news of our acquisition of SmarterAgent. That move alone added significantly to our pack of mobile developers to fuel our consumer strategy.
By focusing on acquisition of technology and talent, combined with the power of our platforms, we are well on our way to creating the home-buying experience of the future and eliminating friction and stress for consumers.
Ultimately these proprietary technologies will make agents even smarter, faster and more cost-efficient (again, dare we say “super agents”?) when serving their customers and taking their businesses to new heights.
Mitch Johnson is the CEO of Keller Capital. He oversees current and prospective portfolio investments for the fund and is also chair of the Investment Committee.