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Moneyball and the Business of Real Estate

October 6, 2011  |  by John Heithaus

Last week, I had a chance to catch Brad Pitt’s motion picture MoneyBall, the story of Oakland A’s general manager Billy Beane’s successful attempt to put together a baseball club on a budget by employing computer-generated analysis to draft his players. The movie (trailer is here) is based on Michael Lewis’s 2003 book Moneyball: The Art of Winning an Unfair Game. Beane’s “genius” in this case was to use data analytics to guide him in his player selection and deployment and, at the same time, ignoring distractions such as player popularity. By doing so, Beane was able to take a perennially losing team (even with big name and huge $ players) and transform them into the playoffs — even with coaches and players fighting him all along the way. Then, when the winning started, the coaching staff and players took ownership of the approach and other teams started to emulate the strategy.

I strongly recommend the movie and book to any serious real estate professional because — from my view, and those of others that really get the future of the business — real estate is less and less about the property-centric data and fast becoming all about the data and business analytics surrounding and weaving through it. The business strategy employed in Moneyball, and how seamlessly it can be applied to the business of baseball (or many businesses for that matter), offers some really interesting parallels to the real estate business as well.

MRIS’s Real Estate Business Intelligence company, RBI, presents an excellent example. Consumers are smarter and more demanding of not just data, but insight from a real estate professional. For the cost of one or two visits to Starbucks a month, an RBI Premium subscription will provide a wealth of hyper local data and tools to enable you to take your business to a new level. No more defending Zestimates (or soon, Trulia Estimates) at a kitchen table debate with a seller ….

MRIS is also focused on what we can to to improve our core service, Matrix, as well as the premium offerings such as agent websites, e-signatures and great enhancements offered at no additional cost to MRIS customers such as e-Fax, MRIS mobile (coming in 2011) and homesdatabase.com, recently ranked by HitWise as one of the top five real estate sites in our market area in terms of unique visitors.

We believe that a business centric approach, along the lines of the strategies in Moneyball, will work to help you do what you need to do — list more, sell more and earn more — even in a down market or as Brad Pitt experienced, with an ultra-tight budget.

American entrepreneurialism created the world’s best real estate business model, and that same drive, innovation and laser focus on customer service will lead the way forward.

We’re really interested in your views on this topic — before or after you see the movie or read the book. Let us know!

Posted in Blog, MRIS CMO Insights

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3 responses to “Moneyball and the Business of Real Estate”

  1. Corey says:

    Great post! And timely, considering this Trulia post from earlier in the week that put some actual stats behind the amount of bad data available to the guy in the backwards cap: http://goo.gl/6VTFh

    "The deets on 1 out of every 10 homes for sale (that’s roughly 120K errors – ugh) that you can find info for online is wrong! " According to Trulia's analysis, 69% of the erroneous data is stemming from 3rd party aggregators (I wonder if this might impact the market trends some of the most popular 3rd party sites are putting out there!)
    If an agent doesn't have the accurate, MLS-backed data in their back pocket (or pulled up on their iPad), it'll take significantly more effort trying to educate a consumer on the true local market trends.

  2. John, I agree that Moneyball is a fabulous movie. It reminds us to question conventional wisdom and "givens". Statistics are critical in today's real estate market just like in the movie. By using tools like RBI agents and brokers can give themselves an unprecedented edge in buying and selling real estate. Like all programs worth their salt, it does take some time to learn how to use real estate data to demonstrate your unique market expertise. A couple of years ago we coined a phrase called "Edutizing". Edutizing is a new way to reach out to consumers. Instead of providing them with "me, me, me" advertising, try a more subtle and professional approach. Demonstrate your unique knowledge of your local market by utilizing timely, accurate data to educate your customers about the market. By demonstrating your expertise, instead of just saying "trust me" like so much real estate advertising does today, you will have a much better shot of winning them over. If you would like to read the full white paper on Edutizing, click on the link here:
    http://waves.wavgroup.com/2009/07/24/wav-group-re

  3. MRIS_CMO says:

    Thanks! That's a great tern Edutizing, love it. We appreciate your comments and perspective, Marilyn.

    Check out yesterdays blog on this same topic, but with a new spin:
    http://mrisblog.com/2012/02/moneyball-punting-and

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