Tribus Cometh: Gehenna or Anarch Revolt?
At the recent RE Tech South conference, I had the opportunity to meet Eric Stegemann — a self-described 25-year old going on 40 — who is the founder and CEO of a company called Tribus as well as the “Head Honcho” of River City Real Estate, a brokerage in St. Louis.
Eric is really one of the brightest guys in the next generation — the Millenials — with a singleminded focus on real estate, technology, and improving the former with the latter. That he makes terrible drinks (some sort of Cherry-Nyquil tasting concoction with a bitter aftertaste) really can’t be held against him. He’s 25-going-on-40; he’ll learn by 30 to savor the mysteries of fine cognac and single malt scotch.
In any event, Eric and I got into conversation and it turned out to be tres interessant. It appears that Tribus is the “un-Franchise” that aims to eradicate the big real estate brands from the industry. The idea essentially is to offer brokers and agents everything they need to operate a real estate brokerage, except for the brand itself and any rules associated with the brand. So, for example, Tribus will give its “affiliates” a CRM system, a listings distribution system, a website, social media tools, accounting package, and so on. But there won’t be a brand like “Century 21” or “Keller Williams”, and no brand identity guidelines. Nor will there be service standards at the Tribus level or any such thing.
Eric believes that the value of these franchises lies in the backend systems and tools, and not in the brand. In fact, he believes that entrepreneurial broker-owners want the freedom to run their business as they see fit, without the baggage that national brand franchises impose on them. They, however, want the support of a national entity for technology and backend processing. So Tribus will provide everything the broker-owners want, and nothing they don’t want, and charge anywhere from 3% – 6% of GCI for those services.
In the World of Darkness fantasy setting, published by White Wolf, an antitribu is a vampire (or Kindred, or Cainite) who has turned against his clan. Since Eric’s company’s name is Tribus, the notion of Anti-Tribus comes naturally to mind if one wishes to poke holes in the concept. But then, that leads to the thought that either Tribus will bring about the end of real estate as we know it (Gehenna = end of the world) or that Tribus is just another rebellion against the existing power structures (another Anarch Revolt).
The Argument for Gehenna
Eric Stegemann makes the argument that Tribus will bring forth Gehenna. It goes something like this:
- Real estate brands are meaningless — just ask any consumer to name the brokerage brand she used to buy or sell their last house.
- Big Brands are clueless — look at how slowly the various big franchise brands have moved to embrace the most basic tools, such as blogs and Twitter.
- Entrepreneurs want support, not rules; they want to be set free, not controlled by Corporate HQ.
So, if Eric is right, then legions of companies and agents will be signing up with Tribus, flipping the bird to the likes of RE/MAX and Coldwell Banker and such, and those imprisoned by the chains of the Methuselahs of real estate will sign with Tribus once their multi-year affiliate agreements end.
That does represent Gehenna, yes. Basically, it means a world without big real estate brands. Regional brands and individual broker brands may survive, but even that may or may not be the case, depending on whether Tribus will work directly with agents or not.
National advertising will more or less vanish, replaced by the sort of late-night cable TV ads of the variety we’re used to from personal injury lawyers. Consumers will relate directly with an individual professional — as they do today (more or less) with attorneys.
And I do think the legal industry is an excellent analogue for what the future of real estate might look like. Retail law (analogous to residential real estate) is completely different from corporate law (analogous to commercial real estate). One might say the two aren’t even same industries.
Retail law is more or less impossible without the support system that technology and data companies — like Lexis and Westlaw — provide. Corporate law benefits from those tools, but with their enormous in-house support structure, leverage those tools in very different ways.
The Antitribu Argument: A Minor Revolt, At Best
On the other hand, the anti-Tribus argument can be made as well:
- Brands are far from meaningless simply by the power of recognition.
- Big brands are far from clueless, and one should not mistake the lack of action with the lack of intent.
- The economics of technology industry favors those with big pockets. CRM might be everywhere in the age of Salesforce.com, but big enterprises have had CRM for a decade while small/mid-size businesses dreamed of the functionality.
- Agents and brokers might leave established big brands for a fling with Tribus, but ultimately will return once the Big Brands start delivering value.
Anyone can offer some nifty widget or tool; but not everyone has a brand with 90+% recognition. The impact of that on even something like SEO is enormous. A study I can’t locate (and don’t have time to look-up right now) showed that branded links get clicked on far more often in Google search results than unbranded links. Given the choice between “Century 21” and “Joe’s Realty” in the search results list, consumers go for the brand they had heard of.
Furthermore, Big Brands aren’t dead; they’re just trying to figure things out. Whatever Tribus can offer, any Big Brand can replicate and improve on in a matter of months, if not weeks.
In The Meantime, Back At Consumer-ville
Some of this theory, of course, is completely irrelevant. I’ve been interviewing random consumers for the past couple of weeks (and have a ton of video to go through and edit) and some of the insights are… shall we say… illuminating.
It isn’t clear to me that brand doesn’t matter to consumers, although not one mentioned a Big Brand or a Big Brand website in their course of search. They reason I say brand might still matter is that they do appear to care quite a lot about brand when it comes to things like banks and hospitals. They’re not particularly thrilled about locations where a known bank branch doesn’t exist, or where the only medical facility is some small, unknown clinic.
Consumers clearly measure agents by the information they can provide, and virtually every consumer I’ve spoken to so far is unhappy with what their realtors provide.
So whether it’s Tribus (or similar independent support/services provider) or it’s the Big Brands themselves who have to provide the tools and support that realtors need to service consumers better is, at the end of the day, immaterial. It’s the sort of inside-baseball stuff that industry folks care deeply about, and the consumers care not at all.
That is, in the final analysis, not good news for Big Brands — or even regional brands or small brokerage brands. Consumers don’t know you, don’t benefit from you and the services you provide, and associate nothing with you. Big Brands have left a vaccuum in the landscape.
My take on the situation is that Tribus represents a minor rebellion — an anarch revolt that the Big Brands of the camarilla can put down with relative ease. But left alone, if the Big Brands do not wake from torpor quickly and start taking steps, they may find that Gehenna is upon them after all.