The global economy continues to undergo seismic shifts. Previous vertically integrated industries became segmented by horizontal service providers, then disjointed as loosely connected networks of service providers. The value creators in the new economy are providing exceptional experiences by outperforming their niche in the network or tying together the nodes of the network and packaging the whole thing in innovative ways.
As part of my recent course at Darden on Innovation and Integration in Services – The New Economy, I made observations on a number of innovations as examples of value creation in this flat, networked world. This is my submission on Zillow.com and the “web 2.0-ing” of real estate.
THE SERVICE
Zillow.com: online, satellite imagery-enabled web site for real estate listings, guides, and discussion.
HOW IS IT INNOVATIVE? WHY DID IT GRAB YOUR ATTENTION?
Zillow.com combined the mass of information on residential real estate, including public appraisals, tax records, and sales records, to provide the most innovative website for real estate listings since Realtor.com. Users can search by various purchase criteria (price, square footage, home features, zip code, specific street, etc.) and find a zoomable satellite map with currently listed properties highlighted, a pricing chart for local real estate prices over time, recent sales data, and user-generated “Make Me Move” prices for homes that aren’t even for sale – but could be for the right price!
WHAT IS THE PROBLEM OR ISSUE ADDRESSED?
Residential real estate is notorious for its maligned gatekeepers: the Realtors. Since so much of the information surrounding residential real estate is publicly accessible and now coming online, Zillow.com aggregates this information to provide a powerful research base for real estate buyers and sellers. Zillow.com represents a triumph of three “flatteners” in particular: The Age of Connectivity, Uploading, and Informing.
IS THERE A CHANGE, DEVELOPMENT, OR TREND THAT CREATED THE OPPORTUNITY? OR, IS IT JUST NEW THINKING?
The confluence of Internet-accessible public records relating to real estate, geo-spatial satellite imagery, and popularity of crowd-sourcing has made Zillow.com one of the top 400 websites in the US. Its national reach reveals its ambitions to bring top local marketplace information to every local marketplace in the country – and perhaps the world.
WHAT ARE TRANSFERABLE QUALITIES TO OTHER CATEGORIES?
Zillow.com is a prime example of a localized service using a globally-connected network and massively distributed information. By providing real value-added insight into local market conditions, Zillow.com has situated itself as a must-stop destination for home shoppers – if only for local real estate comparables. Traders of other local assets with difficult market appraisals but vast information – such as local produce, automobiles, small businesses, dinner reservations, gasoline, haircuts, etc – could borrow this map-driven interface loaded with telling information that generates a basic spot price for the goods in question.
DOES THIS SUPPLANT A PREVIOUS SOLUTION? WHAT, IF ANYTHING, IS THIS DISPLACING? (Think about The Innovators’ Dilemma)
For many, this solution displaces nights at the county records office or desperate conversations with unscrupulous realty agents. Zillow.com provides much of the publicly-available real estate market information to any Internet-connected computer, informing the consumer with the most up-to-date analysis of real estate market conditions. It certainly ups the ante for the real estate professional.
ANY OTHER POINTS WORTH MAKING:
Zillow markets its services in true Web 2.0 fashion – by giving it away for free. Its advertising-supported business model requires it to produce the most consumer-demanded information in order to drive traffic, then to create a marketplace for real estate services within its site. Startup firm Redfin.com has taken the Zillow model a step further – by adding full, online realty agent services to buy and sell properties. Other prominent industry websites, including Yahoo! Real Estate, are now providing embedded versions of Zillow’s valuations and other data.
Innovation and Integration in Services – The New Economy is a second-year MBA course taught by George Barbee, a Batten Fellow and lecturer at the Darden Graduate School of Business.
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