One of the joys of engaging with the real estate industry these days is the opportunity to understand the course of the industry’s current migration and, at the same time, be able to identify the behaviors and adaptations that will allow certain brokers and practitioners to use the energies generated by the current transitions to move their businesses and careers to the next level. Frequently, this effort involves discovering other industries that have previously encountered or are currently encountering similar challenges and studying how their stars and best players bested the challenge.
Dr. Steven Rothstein is one of those interesting people that life allows you to meet from time to time. Steven’s life is all about music composition. He holds a Ph.D. in music composition from UCLA, an academic and teaching relationship that he continues to this day even as his career expands into the world of video music composition, recording and production. During a recent series of interviews and interactions (including my first visit to a vegetarian restaurant) in New York City, Steven introduced me to the digital recording world and helped me understand the mechanics of both its transition and new reality.
The parallels of many, if not most, industries today are noteworthy. The process begins when either or both global investors and digital technology vendors discover industries and professions that have (1) traditionally relied heavily upon analog or manual (a.k.a. human) processes, like medicine, music and real estate; and (2) where experts deem an excessive amount of revenues and opportunities generated by those industries accrue to the sole benefit of industry practitioners rather than being shared on an equitable basis with that industry’s owners or investors.
The invasive procedures utilized by these players are quite predictable. Automation through technology is generally the first step. Research into the traditional internal practices of such an industry frequently discloses significant levels of inefficiency and waste. That is to say that, in all too many cases, revenues that might well drive appropriate returns on investment are actually being expended to no one’s benefit because organized practitioners refuse to modify traditional practices.
In the case of the music industry, this process traces its origins to the period of 2002 – 2005. Since then, that industry has been radically transformed by the introduction of composing software such as the Sibelius product. Such procedures also lean heavily upon the existence of previous resources, the MP3-based technologies and the overall enhancement of the Internet itself. Sibelius software products, which allow composers to directly input both the composition itself and play back the specific notes and sounds the instruments that would have produced, have had and continue to have a profound impact upon that industry’s products and profits.
While the availability of digital composition technologies has had a major impact upon the levels of musical creativity and innovation, an even greater impact has been experienced with respect to recording studios. In fact, over the past year, several long-standing and even famous recording studios have announced that they are closing, leaving literally thousands of musicians, directors and associated professionals out of work with little or no hope for the future of their performing professions.
A secondary impact of this process has been what contemporary economists refer to as “vertical disintegration.” In plain English, this means that the introduction of enhanced technologies into the music recording industry has paved the way for a greater centralization of power in the hands of third party investors. Many experts argue that this process and result has, of course, also been to the disadvantage of both the industry and the consumer.
Meanwhile, other experts argue that these same technologies also contribute to the democratization of the industries and the professions that they touch. In the case of music, the Sibelius software is widely available and is very affordable, thus allowing composers like Steven Rothstein to expand their capabilities, competencies and potential for professional and economic success. Perhaps poetically, this opportunity is not available for those practitioners who argue that they have some manner of constitutional right to engage in traditional practices.
The relevance of these factors to the real estate industry is absolute. There is more than adequate evidence to establish the fact that both the global investor and the technology have discovered the real estate industry and are moving quickly to create a power base. There is also evidence to support the fact that a significant segment of current practitioners, especially those from the boomer generation, are refusing to transition to processes, technologies and procedures that might affect a more equitable distribution of revenues. These factors would suggest to some that the die has been cast.
But, wait! The music industry is prepared to offer yet another superb example of what talented, creative and innovative individuals can do to meet the challenges of the investor/technology impact.
Enter ThePianoGuys. First of all, find their YouTube channel at http://www.youtube.com/user/ThePianoGuys. Spend a few moments validating the effectiveness of their music and their solution (it is, after all, remarkable).
Here is a group of five musicians that have been together less than three years, had little or no personal or investor funding, have completely avoided traditional entanglements, yet have used the very processes that threatened to frustrate and even defeat their professional dreams in a manner that has rocketed them to the heights of success and, seemingly, financial security.
When all is said and done, what ThePianoGuys have done is ridiculously simple. They merely identified what made them vulnerable (in this case, digital composition) and turned it to their benefit by (1) adding a video component; and (2) surrounding the entire package with an amazing level of creativity, high definition, innovation and, perhaps most important of all, joy.
The lessons presented by ThePianoGuy’s story have an absolute reference to the real estate industry. There is no reason for today’s brokerages and/or agents to be defeated by global investors, technology vendors or even “Big Data.” Individual and team creativity and innovation have always outperformed third party packaging and power. It is one of the things that makes capitalism great.
Learn how and why you are vulnerable. Discover what makes you or your business special. Take that unique quality to the next level. Play it out on a mountaintop, a beach or on the rim of a canyon. Find your rhythm, capture your pace and play out your destiny. This is the greatest time to be in the real estate market in the past 30 years. You can do this.