Real Estate Tech brokerage Compass earns its $6.4 billion valuation from smart arbitrage; plus 14 short takes on top developments
Hi Fintech futurists —
In the long take this week, I examine how $6.4 billion real estate brokerage Compass stacks up against the digital wealth and lending companies with a similar go-to-market strategy, and provide some ideas as to why it is successful. Compelling questions also emerge when looking on how technologies like AR/VR are commoditizing the property brokerage experience — what is the equivalent in Fintech?
Long Take
Imagine an industry. In this industry, professional sales people with a technical background try to sell some intangible asset to other people. The asset has a lot of regulation and legalese associated with it — mountains of paper, contracts, and arcane instruments. Everyone wears a suit, and things feel *important*. Transactions don’t happen very frequently, but when they do, it is a life event, and a difficult moment for the customer making a purchase.
Now imagine a technology start-up coming along and saying that they will use software to make this process more efficient. Accounts will be opened online or on mobile phones, using automated KYC/AML. Money will be moved seamlessly, reducing the time of the traditional approach from several weeks down to a few minutes. CRM will be deployed across the sales force, to function like a workflow automation tool that integrates into all of the legal and financial features that make this industry complex. Pricing will go down, customer numbers will go up, and the technology will be deployed directly to the consumer, and then to other traditional incumbents who will rent the software.
I could, of course, be talking about any number of financial services industries. When you look at wealth management, this is the Personal Capital or AdvisorEngine story — taking financial advisors and plugging them into…