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CEO’s Introduction

I hope that anyone who reads this newsletter on a regular basis realizes that one of my primary objectives is to make people question their environment. Things only get better if we constantly evaluate and challenge what we do and how we do it. Sometimes that means looking at scary things, like the future. Of course, I could spend time each month writing, “There, there, there, it will all be OK. Just keep on doing things exactly how you’ve always done them and in five years time all of your problems will be solved and your dreams will come true.” I could, but I won’t.

So, with that point made, let me tell you about Michael - who, in 1980 at age 15, dismantled his first computer. At college he built computers for his fellow students until, at age 19, with business booming and backed by a $1,000 loan from his grandparents, he dropped out.

Originally called “PC’s Limited,” Michael’s business is now called Dell Computers, which employs over 80,000 people, has annual revenues of over $55 Billion, and has turned Michael into a household name. All of this happened in a little more than 20 years. I’m actually typing this newsletter on one of Michael’s products, a Dell laptop, as I wait for a plane.

What was his secret? Over that same twenty-year period, we have seen many similar stories detailing how entrepreneurially-minded individuals followed their hearts, worked hard, and went on to live the good life. It’s the American Dream no less! But the real secret is it’s not just an American dream.

I have no doubt you know who Michael Dell is (or at least recognize his last name), but have you heard of Mukesh Ambani, or Carlos Slim Helu?

OK, I’ll make it easier. Have you heard of Mark Zuckerberg? I’m going to bet that for many the answer is still ‘no’ despite him being one of the most influential American businessmen of this year (the other two are not American, more on them later).

Zuckerberg is the founder of a company called Facebook, a social networking Website that competes with MySpace, Bebo, Hi5, craigslist (via its Marketplace feature), and to a far lesser extent, Microsoft.

In its most simplistic form, social networking is nothing more than a way for people to communicate and exchange information via the Web. Current estimates put Facebook’s revenues at over $100 Million for 2006, with 50 million registered users (expected to be 60 million by the end of this year). Facebook.com, also referred to as “the Web within the Web,” is currently the 7th most visited Website in the world.

The simplicity of social networking, however, hides its true worth. What dollar value do you apply to a mechanism that controls how people communicate globally?

With the number of registered users expected to pass 200 million by the end of 2008, thousands of companies are now scrambling to write programs that will work within the world that is Facebook. Thar’s gold in them thar hills! In response, Google announced their own social networking platform, OpenSocial, last week. MySpace, LinkedIn, and Salesforce.com have already committed to it and the news has helped Google stock pass the $700 mark. As Yogi Berra says, “It’s déjà vu all over again.”

Of course, Microsoft knows all about Facebook - that’s why they bought a stake in the company last month. How big a stake? 1.6%. How much did they pay for this ridiculously small percentage? $240 Million. While you think about these almost impossible numbers, you should know a few other things. Microsoft wasn’t the first company to try and buy a piece of Facebook. Other sizeable companies have tried to buy Zuckerberg out. Allegedly, he has turned down several billion dollar plus offers. Of course, he has been on the cover of Newsweek and multiple other business publications. Oh, one last thing! Zuckerberg turned 23 in May.

It’s a fact that even if you have never heard of Facebook, someone you know has, and already uses it daily. Just how ingrained is social networking in today’s world? Last month, the TUC, a British organization that represents 66 unions making up almost 10% of the countries population, announced that companies trying to ban social networking in the workplace should essentially give up. In fact, they said companies should introduce policies allowing it!

It would be wrong to suggest that Zuckerberg’s achievements diminish those of Dell’s. The latter has built a brand recognized throughout the world. But that brand has been brought into question in the ever-frail world of modern business.

Dell’s early success was based on its “Direct from Dell” model. As a company, they managed to eat market share from far bigger, far richer, and far better known competitors by creating their own process for building and selling computers. Unlike their competitors, Dell decided not to sell through stores, relying almost entirely on their Website for orders. As a computer was ordered it was built. Dell created a JIT (Just-In-Time) Inventory where materials would only be received if they were immediately ready to be used for a particular customer. By avoiding the significant overhead normally created by holding inventory, Dell could compete at a new level. Suppliers who couldn’t keep up were replaced. Direct from Dell allowed the company to substantially lower prices and with us all hoping to hear “Dude, you’re getting a Dell!” things looked very promising. In his 1999 book “Direct from Dell. Strategies That Revolutionized an Industry,” Dell stated:

“Our customers have been a constant source of inspiration and learning; they have provided us with the ideas and feedback that are the basis of our success.”

As Morpheus says, “Fate, it seems, is not without a sense of irony.”

A series of problems substantially tainted the Dell reputation including batteries that caught on fire, financial irregularities, and outsourced support that was poor at best. Customer satisfaction began to tank with the Wall Street Journal stating Dell was “facing its worst crisis in years.”

Dell turned to social networking, and through their One2One blog, started interacting with their clients. As feedback went both ways, the number of complaints dropped and customer satisfaction rose. Although still not completely over the problems, Dell is now heading in the right direction. They have also discovered (again) that they will need to continuously involve their clients, not just sell to them.

What is significant about this step is that, unlike ever before, customers could complain publicly and force Dell to respond. The balance of power in the world had changed significantly and permanently.

In Thomas L. Friedman’s excellent book, “The World is Flat,” he identifies three stages of global business evolution:

1.0 – Countries Globalizing
2.0 – Companies Globalizing
3.0 – People Globalizing

Of significant importance here is that it took centuries to go from The World Version 1.0 to The World Version 2.0. The upgrade to 3.0 only took decades, so will 4.0 be here in years?

The current version of The World is 3.0, and it is social networking. The fight against Dell was by the people, for the people, and the only way to defeat it was by social networking. Social networking is Facebook. Facebook is not even four years old. Are you keeping up?

Not everyone agrees with Freeman though. In his book, “Redefining Global Strategy,” Pankaj Ghemawat identifies that failing to understand cultural, administrative, geographic or economic differences will ultimately end in failure. The Economist suggests he re-title the book “The World is Not Flat.”

There is a natural and consummately human need to pigeonhole things - people, businesses, even countries. I always enjoy it when someone starts a sentence with “You know, they say…” Ultimately we cannot paint a true picture of any one group of people with a single brush stroke. But every process they work with can be evaluated with a view to assimilating it better for the collective good.

In the beginning, Michael created Dell and he did so by taking an established process that many thought already worked well and turned it on its head. Inventory! Blasphemy! Let’s build a new world. One where despite significant competition there is a better way. But was it the best way to do things?

As business people, this question should be at the heart of everything Realtors do. The process of buying (or selling) a home is a complex one and Realtors do a phenomenal job helping their clients walk safely through a minefield of potential problems. But, is every step of that process the best way to achieve the ultimate goal?

Never before has the term “village earth” been more valid. Whether it’s global warming or the price of gas, we are affected by things happening somewhere that’s ‘not here’ every day. Over the last few years, the media has focused on where they think the next ‘new market’ is. It was the Latino market, then China, then India, then China again. The truth is there is no new market place, there is just one big market - inextricably and permanently tied together by cables, circuit boards and a global quest for the American Dream.

What this means to Realtors is that if they aren’t asking, “Is this the best way to do things,” someone else is. And the odds are that they will not be on this continent.

Is it possible to buy a house without speaking to a Realtor? Is it possible to sell a house without speaking to a Realtor? Have you ever had a client that you never met? Someone you dealt with only by email or telephone? Today’s consumers are supported by tools and methods that empower them like never before.

Dell states:

“If you accept the status quo as “good enough,” you’re managing in a rearview mirror. And, in this economy, you can bet you will end up smashing right into the future. Just to stay competitive, you have to constantly question everything you do.”

It’s now possible for the individual to control the empire. Power to the people!

Should anyone looking to buy or sell a house care if the transaction is controlled by someone in Boston or Bangalore? Surely with America being the most powerful country in the world, we can and will control our own destiny? Unfortunately, the rest of the world (that’s the other 96%) has other ideas. Mukesh Ambani (Indian) has now supplanted Bill Gates and Warren Buffett as the world’s richest person. Carlos Slim Helu (Mexican) held the same title earlier this year. American businesses can no longer assume a dominant role; it’s all just one big market place.

Put another way, businesses used to look for clients for their products. Now, they look for products for their clients.

Dell again:

“Since an early age, I’ve been fascinated with the idea of eliminating unnecessary steps.”

It’s all about dismantling the ‘product’ and working out how to rebuild it better, quicker and cheaper. Doing that while keeping the consumer experience unique and personal is the tough bit. My suggestion? Don’t imitate - innovate!

The process of buying and selling a home is now being questioned by every Tom, Dick and Ali. Social networks are where it’s happening and having a designation isn’t a prerequisite.

If you don’t know about social networking you need to. Your clients do, and they are talking about you whether you like it or not. Just ask Michael.

As always feel free to contact me personally, at any time, for any reason.

Stephen Fells,
CEO

Have you entered our NAR Power Contest?

This year’s National Association of Realtors Convention to be held in Las Vegas from November 13 through the 16th marks the organization’s 100th anniversary.

To commemorate the special occasion, AgencyLogic has teamed up with Michael Russer, aka “Mr. Internet” and STAR POWER Systems to offer a cutting-edge listing specialization prize package worth more than $1,750.

The NAR Power Prize Includes: Enrollment into Michael Russer’s brand new, “Mr. Internet’s Online Dominance Training Program,” STAR POWER’s “Systems That Work: The Listing Process” and “Pre-Listing Books That Work!” and a 10-pack of AgencyLogic’s industry renowned PowerSites.

Enter at www.NARPower07.com before November 14th, or if you are going to NAR, you can visit either the STAR POWER booth (#4423) or the AgencyLogic booth (#3950) and enter at the show.

This contest is open to everyone, not just those attending the NAR convention. Three winners will be announced at 2:00 pm on Thursday, November 15th. Winners need not be present.

Are You Going to NAR? Stop by our booth to meet Mr. Internet!
Attendees can also meet Michael Russer and learn more about “Mr. Internet’s Online Dominance Training Program” on Thursday November 15 at the AgencyLogic booth from noon until 1:00 pm and again at the STAR POWER booth between 1:30 and 2:30 pm.

AgencyLogic Client in the News!

Previous PowerSite of the Month award winner, Brendan Cooke of RE/MAX in Baltimore, MD was featured in the Baltimore Sun’s article, “Slow Realty Market Goes High-Tech: Brokers and agents rush to embrace trendy tools.”

Click here to read how Brendan’s tech-savvy marketing (including the use of single property PowerSites) is giving him great visibility in his market and priceless credibility through news coverage!

Meet us at NAR

Visit our booth for special discounts and your chance to enter our daily drawing for a five-pack of AgencyLogic PowerSites and a signed copy of The REAL ESTATE WEBOGRAPHER Web Technology Handbook!

November 13-16
National Association of Realtors Convention
Booth 3950
Las Vegas, NV

And don’t forget to enter our NAR Power Contest!

Increased FREE Visibility for Your PowerSites

We are pleased to announce that we are now offering our clients the opportunity to submit their PowerSites to Homescape, the leading online provider of local, comprehensive real estate property listings and rich content - FREE of charge.

Other newer portals added to our Lighthouse Marketing System include www.vast.com and www.local.com. Click here to learn more.

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