The Anti-Marketer

Zillow Aims to Disrupt Lending Market With Its Mortgage Marketplace

Whenever someone claims they're going to disrupt a market as part of their marketing message, I'm suspicious. Disruptive innovation is not a marketing buzzphrase, and it's only relevant to internal business and marketing strategy, and possibly to major investors.

Zillow, in fact, is not even remotely disruptive. To start with, they'd have to have accurate and reliable information in their system. And you can't automate comparables, especially when there is high market volatility or a transitional market (e.g. in-fill housing that is twice as expensive as neighboring homes). It also doesn't account for major changes, such as adding a second story, a complete gutting and renovation, tear down and replacement, or foreclosures which temporarily distort markets. If the information can't be relied on, there's no reason for buyers or sellers to go there. All it does is add friction to the process.

To be disruptive, a product or service or business model must address a real problem and serve an unmet or under-served market need. Zillow does none of these for the end consumer. At best, it provides a ballpark estimate of a home's value before I commit to talking to a realtor, but there are numerous other places I can also get that information.

Sorry, no disruption here.

Wondering if you do any analysis, or just read off the vendor's press release.