In response to The Future of Online Real Estate Innovation, by MarK Davison. Hey Davison, what you're saying is a good thing, a great thing even, but those of us who started a company in the months following 911 look at your post and chuckle. Not because it’s funny, but because we remember how tough it was and how far we have come. We had no choice but to bootstrap our operations, build brick by brick and eat what we killed and nothing more. We had no choice, there was nothing more.
Those of us that are still here, are looking at the current climate and continuously reminding ourselves that the foundations on which we built our companies is solid. The lack of funding has forced us to be disciplined, innovative, and thoughtful.
So many innovators are poor business people though and in some cases funding only exacerbates that situation.
Better, smarter entrepreneurs. Rich Barton is a rock star. A visionary. Someone with tons of brains and a killer track record. But going forward, I'm not sure that's all that's needed to win. Future online real estate innovation will likely be driven by smart business people with tons of domain knowledge focused on solving a specific problem. We are working with some of these people right now. They know their stuff, nail the use cases, and evidence none of the hubris that has wrecked too many large-scale online real estate plays.
I love this statement, but would Rich Barton be the same rock star if he started Zillow with his own money? Perhaps he did and perhaps the answer is yes, but the conclusion you came to of his business doesn't seem to indicate that same fundamentals as I described above. Was it him, the funding, or both? While companies like him are cutting 25% of their work force, we’ve increased 100% since this time last year. Our clients have a lot more problems to solve and are turning to us:)
But like innovators a lot of us entrepreneurs are poor business people. Our passion, drive, and relentless approach to pushing our business forward are facing major reality checks these days, just as they were in the past. So you are correct that we need to have domain knowledge and create proof of concepts, but we also have to become operators of a real business. For some of us that’s not so easy. We love to dream and stretch, and when revenue slows and outlooks are bleak, every decision we make can have a material impact on our present and our future.
The reality is that there’s still plenty of funding out there buts it’s now earmarked for healthy companies that really don't need the money, companies that if funded, could just do things quicker and bigger.
A great idea with no legs just won’t cut it today. Just like it didn't after 911.
The moral here is that being poor is a very healthy way to build a business. As Davison points out, it simply forces us to use other forms of currency other than money. Without funding, companies must focus on great ideas that will solve problems, and they must be run lean, with great focus on execution and driving value. These are companies that can make it through the rough times, and flourish in the good ones.
Image Credit: Jarle Naustvik on Flickr.com