This is a repost from December of 2010, nearly 2 years ago. I think it’s interesting that much of this has already start to come true. I recently discussed this with a client over the phone after she gave me some advice. She said,”We would rather work with a company that does one or two things very well, than with one company that does everything satisfactorily.” I feel there is room for both in this industry, but eventually any successful small businesses will likely be bought by the successful conglomerates. This is not unique to our industry, of course. Feel free to weigh in your opinion and give me some feedback on this.
I’ve not blogged in a while, but this topic keeps coming up almost every day for me. I see it in marketing, IT and operations on a regular basis. Essentially, there is a race in our industry to be the first company that can be a one-stop-shop for owners and managers. The more services a company can offer, the more weapons they have in their arsenal. In meetings with credit reporting/background verification companies, they talk about their Craigslist posting service and web site design capabilites. In meetings with property management software companies, they talk about their ability to do utility billing (RUBs) or lead tracking numbers. In meetings with lead management and call tracking companies, they talk about their upcoming property management software package. In a few years you will be able to go to the company that did your water billing five years ago to design your website, track your leads and manage your social media.
There is an inherent problem to all of this, initially, but I think we’ll find it to be extremely successful in the long run. The best way to illustrate this issue is using an industry that is very near and dear to me, the auto industry. Growing up in Detroit, I watched the big dogs slowly lose market share to newcomers to the market. Hyundai and Kia, for example, started to manufacture cars in South Korea. Hyundai was originally a construction company. Kia originally manufactured bicycle parts and metal tubing. These two companies are now one large company and happen to be the fourth largest manufacturer of automobiles in the world. A South Korean company. Who would have thought? Just like who would think today that a company that we use today to track our marketing leads might become our property management software provider in a few years? It will happen and stranger things will also happen. Here’s the issue I need to address: Kia and Hyundai made crappy cars for a long time. Cheap and crappy. So crappy, they had to put 10 year warranties on them in order to compete. These cars didn’t even last ten years. The tires didn’t even last ten-thousand miles. I’m exaggerating, but hopefully you get the point.
The companies that are in this race in the apartment industry are essentially designing a vehicle for property owners and managers to drive their business. The problem is some of them have crappy transmissions and some of them have to demand a recall because the gas tanks explode on impact. To put it in terms of our business, some of them have crappy craigslist posting tools and some of them have not quite figured out how to make sure there isn’t a break in the code when a resident tries to reserve an apartment online. This means we have to have spare parts lying around to compensate for the shortcomings of the “one-stop-shop” concept until it is perfected. This could get pretty costly, but in the long run we may simply have to sacrifice in order to support this initiative. Also, there will be a-la-carte options offered as well, I’m sure, but this too will more likely cost more than the one-stop-shop solution.
I don’t know who the winners will be and I sure don’t know how long it will take for the first company to get there, but the bottom line is, this is a great thing for our industry. Kia and Hyundai make some pretty nice cars today and are winning awards for quality and design. I hope the companies that are competing in this race to be all things to all people in the apartment industry figure this out soon. It’s exciting to watch as the quality of products and services in our industy continue to improve.