Why we Need to Pay Attention to Unicorns
Recently I did a talk for Relocation Directors Council and while I covered many topics during that hour, one of them was to tell a story about the PGA and LIV Golf. You may ask, why on earth were you talking about golf? I used it as an example of how if we don’t continue to grow and improve, someone will come along and do it for us.
That is what just happened to the PGA. The Professional Golfers Association has pretty much fundamentally stayed the same for the last 65 years. That is until 2022 when they were forced to look inward and see how they might modernize a bit. But they only did it because of the pressure from a disrupter known as LIV Golf which was founded in 2021 and launched its inaugural season in 2022. It was forced innovation. And it was driven by an entity with unlimited funds.
Big-name pros were being lured away by the new enterprise that was standing the old ways on its head. LIV actually is the Roman numeral for 54. They play 54 holes in a tournament versus 72. The play is faster, they play in teams and compete individually. They have cool music and graphics for the TV viewer. They mic the players so they can talk to them while walking between holes. The players can wear shorts and they make more money. Their pool of players is smaller. It’s like the PGA’s cool uncle. You can see why some players and many fans are paying attention.
When in doubt, sue.
While there have been many questions and opinions about the money behind LIV, they succeeded in luring some top players to their tournaments. What happens when there are sore feelings? Lawsuits. The original lawsuit accused the PGA tour of US antitrust violations. Then the PGA sued LIV for interfering with their business by offering players millions to break their contracts. With limitless resources, LIV and their Saudi money could muck things up with years of expensive and messy antitrust litigation. Not to mention the threat of poaching PGA stars. I am not going into the details here, it is irrelevant now.
It is irrelevant now because on 6/6/2023 the PGA and LIV Golf announced they are merging. All hard feelings and lawsuits are out the window. Maybe the hard feelings still exist, but the money they all stand to make from it will ease the pain. So while you may not care anything about golf, there is a lesson to be learned here. The PGA had been doing the same old thing for a very long time. Someone came along and said, “Hey, what if we made this way better? For the players and the fans, and made a lot more money”. Even though the PGA freaked out about everything LIV was doing, they were forced to make some changes and I am sure secretly realized that some of the things LIV was doing made a lot of sense. Sound familiar?
I’ve been there.
I experienced a similar situation in my own career. I worked for a large California brokerage whose leader regularly vehemently blasted the unicorn brokerage that was buying its way into big markets and writing checks to lure agents away. During a company retreat with employees, they stood in front of us and bashed the competitor. Two weeks later we were shocked to find out the company we loved had been sold to that unicorn. And we learned this through a leaked email to Inman News. Not only did we all have to come to grips with our uncertain future, we found out when everyone else did via the media. It was all about the money, not for us, but for the owners. Or maybe the leaders thought we couldn’t compete or they were too tired to try. It’s funny how principles and beliefs can be compromised so easily when big money is involved.
Pay attention to what the consumer wants. Not what you want.
That’s what happens when you get too comfortable and when you think that what you are doing is fine. Let’s look at the disruptor, Zillow, for example. Did they need to exist? Absolutely not. Brokers had all of the same data that Zillow gathered. But they should have listened to the consumer instead of worrying about retaining control. It is the same with Destination Services Providers. They also did not need to exist. Real Estate brokers and their relocation departments can provide exactly the same services a DSP can provide but were unwilling or unable to create a service delivery model that fell outside of the typical real estate transaction.
The same goes for mortgage companies that are ‘selling’ leads to real estate brokers for exorbitant referral fees. They aren’t even what I would call disrupters, they just saw that brokers weren’t capturing the customer and figured they could. The broker has the same opportunity to market to the same audience they just haven’t figured out a way to organize themselves to do so. So instead they pay the referral fees so as not to upset their agents instead of using their energy and resources to figure out how to get in front of the customer before the mortgage entity. I assure you, people look at houses online before they apply for a mortgage. So basically the consumer looks at homes (maybe on your site or on Zillow or another like entity), then leaves that site and goes to get approved for a mortgage where that entity sells you back that client that you already had access to.
I could go so far as to say that basically any ancillary service that surrounds a real estate transaction or a relocation could have been delivered by the real estate broker, short of those that might be a RESPA violation or governed by another government entity that prohibits it, but brokers have been so laser-focused on the transaction, they missed all of the opportunities to create end to end experiences years ago.
Buying back what was already ours.
Think about how many brokerage firms have been started by someone who thinks they can do it better and leaves their company to start their own venture. Then a few years later you hear about that traditional firm buying that new firm. Sometimes it is just to silence them or recapture market share, other times it is to learn from their model. Talk about the best revenge. Leaving a company that taught you everything only to sell your new venture to your original company. It happens all the time. If only brokers would be willing to try new things and embrace entrepreneurs who grow frustrated with their stale models.
It’s time to stop trying to protect our own interests. And it is time to think about what the consumer of our services might want and need today and in the future. That’s not just buyers and sellers, it’s the corporations, the RMCs, the agents, our leadership, and anyone else we touch along the way. Change is uncomfortable. It often means we have to work harder and maybe lose some control.
What happens now?
I can’t wait to see how LIV and the PGA maneuver through this merger, which seems a bit more like a hostile takeover. Maybe the PGA knew they couldn’t win an unending fight that had no clear path to victory. Which entity will reign supreme? If the PGA adopts the modern tactics of LIV we will know that they realized the unicorn was worth paying attention to. If the PGA squelches LIV’s new ways, we will know that the merger happened to quiet the competitor and silence the threat. Either way, they are a bunch of hypocrites that don’t really care about the fans. It’s all about the money in the end. While golf will fundamentally be changed forever after all of this, the fans will likely end up with a better experience in the long run.
It’s time to look around and see how we might improve just about everything we do. If we don’t, some cool uncle is going to come along with a lot of money, upset the old ways, and force us to innovate.
“I’m not going to sit here and lie; I think the emergence of LIV or the emergence of a competitor to the PGA Tour has benefited everyone that plays elite professional golf, I think when you’ve been the biggest golf league in the biggest market in the world for the last 60 years, there’s not a lot of incentive to innovate. This has caused a ton of innovation at the PGA Tour.” ~ Rory McIlroy, Professional Golfer
