
Want To Disrupt An Industry? Try Actually Working In It First - luxiou
http://www.fastcompany.com/3001334/want-disrupt-industry-try-actually-working-it-first#full
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itmag
Many tech guys on HN often ask: what use are business co-founders?

Superior domain knowledge would be one thing. If I'm going to team up with a
business guy, I want him to be a top notch expert in his field.

There's a tendency for tech guys to discount domain knowledge, believing that
it's just a matter of "hacking something out in a weekend, after all it's just
a matter of shovelling data" (I used to fall into this trap myself - now I
know the value of domain expertise).

~~~
dasil003
Domain knowledge is money-printing sauce in so many industries.

I think the reason young hackers often dismiss domain experts is because they
associate the idea of domain knowledge with old people who don't get tech.
It's true that most old business people don't understand technology, but it's
also true that most young hackers have no clue how to make money.

Now if you can combine domain knowledge with the ability to recognize the
potential, and have a realistic vision for the novel application of
technology, then you have gold. It might not be the most grandiose idea, but
it's 3 or 4 orders of magnitude more reliable than trying to be the next
Google or Facebook.

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leelin
Hey, this is Lee from RentHop.

One thing that isn't very clear from the writeup: we went through a LONG
trough of sorrow before finding our current pivot. That's a story for another
day...

~~~
gawker
Thanks for the article and the insight, Lee. I'm planning on building
something for real estate as well and have some target users working with me
but I probably might not have enough insight on the pains of the process. I'm
tempted to go your route and get a broker license as well.

~~~
wtvanhest
I spent 5 years in commercial real estate brokerage (multifamily) and closed
some signifigant deals. What you are building is radically different that what
I am working on, but they are both in the real estate space. I'd be happy to
talk to you sometime about it. My email is my HN name at Gmail.

~~~
gawker
Thanks for the offer and I'll take you up on it. I'll shoot you an email when
I get home.

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mijail
New York real estate is a system. You have to learn the system to hack it.

A lot of real estate start ups are trying to "Avoid the Broker." The system
isn't as broken as we may think. Landlords enjoy minimal vacancy. Brokers get
paid generously. Tenants find apartments.

Complaining about a 15% broker fee is like complaining about the gas for your
Lamborghini.

~~~
ThomPete
Thats easy to say, once you learned to hack the system.

But many brokers do take money to simply show you the apartment and nothing
else.

~~~
mijail
They are the "1-click" brokers. The experience doesn't mean that they aren't a
part of a complex system. We usually applaud efficient systems don't we?

15% is justified because people pay it.

~~~
ThomPete
That does not make it justified by any meaningful definition of that word.

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robrenaud
To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening
up a few doors really worth 3k?

~~~
malandrew
My mother is a real estate agent and worked in both NY (westchester county)
and NC (raleigh) and I grew up helping my mother with myriad activities
necessary to list and sell a house

You'd be surprised how much work is required to keep the real estate market
liquid. I'd say half the work is necessary, some automatable, some not so
much. However, a lot of the work doesn't even have much to do with work
necessary everytime a home goes on the market, but rework that is repeated
every time a listing goes on the market. A listing that was on the market last
year that goes on the market again this year needs all the same work done to
get it sold.

Here's just a sampling of the types of things that need to be done on every
sale:

\-- finding inspectors and getting inspections done

\-- getting radon tests done (difficult to schedule since house needs to be
vacated if I recall correctly

\-- showings (how to show a house, how to talk about it. how to sell a
lifestyle, especially in a home with no furnishings)

\-- fixing things, which is often dependent on contract negotiation. Sometimes
things that need improvement will be deducted from the price, other times
fixing them will be a requirement to close the deal.

\-- home staging. for homes with no furnishings, companies exist to stage the
home, especially for open-houses.

\-- disclosures (near an airport? did someone die in the house? carcinogenic
chemicals on site before construction?)

\-- proper photographing, which is hard for most people because photographing
homes that will generate interest isn't as trivial as you may think. One of
the biggest issues with photographing was lighting both inside and out. Most
agents don't carry lighting necessary to photograph homes. Some homes have
built in lighting, some have lamps. Those that use lamps may not have any
because furniture has been removed. Most agents aren't technically competent
enough to handle a camera more complex than a simple point and shoot. Outside
lighting for homes requires planning to make sure the weather was nice and
that at least the front of the house was lit, which itself depended on which
direction the house faced (north, south, east, west). Getting the photos from
the camera to MLS and creating brochures with them is complex for many people.

\-- MLS management

\-- Searching of the myriad criteria that people evaluate a house on (schools,
commute, etc.) Everyone has different lifestyles and needs. The criteria for
one client will differ dramatically from the criteria for another client.

\-- centralized showing

\-- lock box management so other listing agents can show a house.

\-- scheduling

\-- Knowing whether a house is a good deal or not. Your agent is essentially
your negotiator. A good agent will not only find you a home that fits your
lifestyle, but they will help you negotiate with the seller/buyer on your
behalf. This is probably where the fees are most valuable.

\-- Negotiating with a bank. You have no idea how many deals these days get
blocked by a bank, especially if the home is underwater.

\-- floorplans (bonus points if any startup makes it easy to mash up
floorplans to room photos, the same way that people mash up photos with latlng
data and maps).

\-- ability to simulate your current belongings in the new home? Do you have
too much stuff? Not enough stuff? What fits? What doesn't?

\-- Architectural vocabulary enlightenment. What's the difference between a
victorian and an edwardian? What are dorian columns?

\-- Energy efficiency of a house? What are the bills and utilities the
previous tenant paid?

\-- Hooking up utilities in a new place. Can it be streamlined?

\-- etc. etc. etc.

This is all just the tip of the iceberg. I don't think there is a one size
fits all solution that can automate all of the above, but there is definitely
room for a few dozen startups and that you could essentially create an entire
VC fund with real estate as your thesis. TBH, I think that is the only way
"real estate" will ever be solved. There are way too many moving parts to have
everything solved by one company. APIs are necessary for solving the problems
above.

Finally, NYC and SF are very very very weird markets by real estate standards.
Most markets are fairly balanced, but both NYC and SF are heavily skewed in
favored of sellers. This makes them very unusual and I can't imagine a
solution that works for those two markets working in other markets.

~~~
syedkarim
Most of the work that you are referring to pertains to real estate sales. I
believe the original comment regarding the $3K and NYC brokers has to do with
leasing agents/rental brokers.

I was a leasing agent before; there's really nothing to the job.

~~~
kimura
I am a current leasing agent; there is a lot to the job.

~~~
malandrew
I'd love to hear how your responsibilities as a lease agent compare and
contrast with the list I wrote above for a buyer/seller agent.

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stevewilhelm
I agree with the title of this article, but a month is not a sufficient amount
of time to understand an industry.

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readymade
Unless you're getting sued or threatened with jail time, it's not disruption.

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bearmf
Great site! I have just discovered it from the post.

One thing I immediately noticed: If you are looking for 2br apartments, you
will get a lot of results that are not actually 2br, but 1br that could
possibly be converted into 2br. They are not yet converted, the renter has to
do all the work himself.

Is there a way to filter out such listings? They usually mention it in the
listing description. Maybe a fine-grained selection of apartment types would
help: studio, junior 1br, 1br, "1br big enough to convert", 1br converted,
2br, etc.

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codeoedoc
Can't agree more.

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pippy
No. The best way to disrupt an industry is to do something unrelated -
something crazy and something different. You'll never break the mould and
explode by copying incumbent industries line of thought.

For example the real estate industry has been upset most in New Zealand by
trademe, a company started by someone who wanted an easier way to buy a used
toaster. The industry here is still scrambling to catch up, instead of
competing with a startup trying to emulate their business model.

By doing what the article suggests, you'll be above mediocre at best. Think
different (tm).

~~~
sliverstorm
Engineers have a tendency to underestimate anything outside their discipline.
"How hard can it be!?"

You would do well to remember that, when looking at an unrelated industry and
decided that you, having zero knowledge of that industry, are _obviously_ the
best-positioned to completely revolutionize said industry.

Really, the biggest breakthroughs appear to come from someone who mixes
expertise in two disparate fields. Expertise in the one field teaches you
about the constraints on that field, and expertise in the second field gives
you new tools to attack the constraints of the first.

