3 Reasons why your (real estate) ideas are worthless
Some personal advice and ramblings on people approaching you with their ideas. From the trenches.
If you thought about this brilliant idea, chances are good that a couple of other people thought of the same idea. There are after all, 7 billion people in the world although maybe a few less people focused on real estate. What I have found over the years, is the same ideas popping up infrequently but manifesting itself through a different story. Some ideas are just sugarcoated representations of existing disruptive models (e.g. AirBnB, Uber) or maybe even a combination of a couple of great models.
Now if that idea isn’t unique, will it withstand the test of time or if it can be replicated easily by someone else? If it can be replicated and turns into a commodity there is a danger of your product entering into a downwards spiral of price wars where there are no winners.
2. Execution aka elbow grease
Ideas are worthless without execution but it only starts to sink in when you’ve toyed with an idea for a time and then realize that stark reality that you have nothing to show and everything is on a paper napkin or mind map (I love Mind Map tools to jot down my own ideas) and your bank balance is still zero.
What you need is people who can execute and make things happen. You need someone who can act as the glue, and this is pretty much my role at Entegral, where we build real estate products. Too many companies are started from the top down without people who can execute. They throw around ideas from a boardroom table and expect others to magically turn into something useful someone will buy.
You need people who not only can put your idea to live, but apply some pizzazz to it. What you need, is people who can get up in the morning and put real elbow grease in to build that product, and go through lots of iterations to fine tune it. Without people who can execute, you may end up launching a flashy product that is all rotten in the inside. I’ve seen this a lot: a good idea that is poorly executed, marketed the shit out of it, only to succumb to a poorly designed platform that halts to a grind quicker than a mountain bike in pedal height mud.
Few understand that a lot of time has to be put into a well thought out architecture and that backbone is critical to make the top shiny. We’ve spent a year building our Flex Template Language Platform for real estate and are now only starting to reap the rewards and putting the icing on the cake. But we’re not done, products need constant code refactoring and rework from user input and real world analytics, so we continue to spend a lot of time on the framework, most of which is under the skin and not visible to our clients.
Most people don’t have the cash flow to execute their ideas, or quite their job to start working on that idea, so they start looking around for funding. This I have found is hard to get, even for established businesses although we’ve bootstrapped and stayed clear of that route.
Over the years countless people have approached me with their real estate ideas while running Entegral. (everyone needs a tech company these days to execute their idea). Most make the assumption that their idea is good enough and that the funds and time to execute that idea will come from you. Their contribution is ‘their idea’….. Risk is a brilliant thing, as it drives us to innovate and bring unique ideas to life, but when you have to do 99% of the work in exchange for the potential of making money it just doesn’t make sense.
Before you venture into any new business with someone approaching you (approaching you since you have skills they need), have a look at:
- who will be doing the actual day-to-day work?
- who will open their wallets and pay your hours?
Don’t fall into the trap of doing free work in a new business for exchange of equity in the company. That company is worthless until it has paying customers and actual cash flowing into it. Set the idea to the side and look at who will be doing the actual work and paying for it. Your time is your most valuable asset, spend it on the stuff you are passionate about and on making your own dreams reality.
You need to feel it in the air.