| what's the dream business model of every VC? a marketplace. the ideal outcome, though perhaps improbable, is likely to become the ebay of real estate. what they lack is critical mass. today, they're focused on seeding the marketplace with sellers, that is filling the supply side, which is the natural place to start. this is a long way of saying that it seems not at all unreasonable to hope they will emulate amazon's AWS strategy of reducing fees as costs fall, not only to deepen their competitive advantage but also to drive them closer to critical mass. but given the high costs and uncontrollable risks, they need to, in the early stages, compromise growth for unit economics and cash flow. fundamentally, they're using machine learning and automation to remove guesswork and fat from real estate transactions, so this company will be interesting to watch. what many commentators miss is that OD is selling a service to home owners. it would be helpful if knowledgeable real-estate people focused on (a) estimating how many sellers want this service; (b) if 2% seems reasonable for OD's service; and (c) if this initial market is large enough to jumpstart their marketplace ambitions (assuming this is the end goal). |