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Diving Deeper in This Month’s Cover Story: From Vision to Reality – Upstream Gains Momentum, Appoints CEO

Jun 12, 2016 by

“All the forces in the world are not so powerful as an idea whose time has come.” These words, penned by poet and novelist Victor Hugo, describe the momentum building behind the concept dubbed “UpstreamTM,” which has dominated conversation within the real estate industry recently. As the idea moves to reality, we are learning more about how this project can benefit agents and brokers of all sizes and business models.

While the integration of computers and the Internet affected every industry, real estate has seen as much impact as any. Initially, the brokerage community’s natural approach was to relegate technology to others, while focusing on the core of real estate practice. Then, markets expanded and customer expectations for information shifted beyond the current boundaries of MLSs—both the geographic limitations as well as the limited types of data. Internet portals began to fill the void, covering the map and offering a wider range of content.

As brokers began working to make their digital tools more robust for agents and consumers, they encountered obstacles that would make improving their level of service more expensive, more inefficient, more time-consuming—and sometimes downright impossible.

Firms found data was often difficult to get from MLSs or vendors when they needed it. And, time and money was required to reformat data to make it usable. Changing from one vendor to another was a monumental task, as the vendor-held data had to be transferred and reformatted. Brokers saw the same data being entered over and over. Often, that data did not match, because of errors or inconsistencies among data entry platforms. When a change was needed, firms had to go to every place the data was entered to make adjustments.

Before long, incorrect or out-of-date information was available in a variety of destinations, and reining it all in was daunting. Data also appeared in unauthorized places. Courts began to weigh challenges to copyright and ownership. Vendors and MLSs began cutting deals to make broker data available to companies that were not participants in the MLS.

Conversations about these issues became more organized as leaders from The Realty Alliance and Leading Real Estate Companies of the World® (LeadingRE) recognized the universal nature of these problems and invited representatives from Keller Williams, RE/MAX, Realogy, NRT, Realty Executives, Berkshire Hathaway HomeServices, HomeServices of America and others to work on ways to reset the data infrastructure to better position practitioners to innovate and serve consumers.

“What is most remarkable about UpstreamTM is not the idea or the technology that will power it, but the unity and commitment to this solution across business models, brands and companies of all sizes,” says President and CEO of The Realty Alliance Craig Cheatham, who has served as interim staff for the project from its early days, and is a member of the Executive Committee and Board of Managers of the legal entity that operates UpstreamTM.

The participants succeeded in creating an idea that enhances the level of competition and the number of competitors. It promises to give tools and capability to the smallest and emerging real estate firms that they could hardly afford otherwise.

The resulting idea has three components: a mechanism for entering and editing data, information storage, and a platform for managing data distribution. The concept is simple, but has powerful potential.

“UpstreamTM will elevate our industry by streamlining the cumbersome data management process and releasing resources to focus on innovations that will enhance the consumer experience,” says LeadingRE CEO and UpstreamTM board member Pam O’Connor. “It is the first cross-industry initiative since the formation of MLSs to have that kind of game-changing, collaborative vision.”

“This idea is not unprecedented,” says Dan Elsea, president of brokerage services at Real Estate One and member of the UpstreamTM Executive Committee and board. “The airline industry, for many of the same reasons, created the Airlines Tariff Publishing Company years ago as a data clearing house. It operates, like UpstreamTM, as a cooperative.”

Enthusiasm for this kind of future is palpable among all corners of real estate brokerage.

“This initiative represents a transformative event in our industry,” says Mark McLaughlin, CEO of Pacific Union International and UpstreamTM board member. “Technology efficiencies, data quality and reduced operating expenses will be tangible benefits. Brokerages, MLSs and vendors dependent on timeliness and quality of data will all benefit from UpstreamTM.”

National Association of REALTORS® (NAR) President and UpstreamTM Board and Executive Committee Member Tom Salomone agrees. “When the project is up and running, this innovative back-end technology, which boasts a single entry point and standardized data fields, will give brokers and agents greater control over data and its distribution, greatly improving how their businesses operate by reducing redundancies and saving time and money,” says Salomone.

“UpstreamTM creates the needed utility in our industry for ‘data management’ and brings stakeholders together in a collaborative and cooperative environment, working toward what’s best for consumers, agents and brokers,” says Jeff Detwiler, president and CEO of The Long & Foster Companies and member of the UpstreamTM Executive Committee and board.

“UpstreamTM has the potential to drastically alter how we as an industry operate by giving brokers of all sizes the ability to distribute their data wherever they choose,” says Cary Sylvester, vice president of industry development at Keller Williams headquarters and UpstreamTM board member. “It’s about efficiency, improved accuracy and enabling innovation, so we can continue to improve the real estate experience.”

Brokers are excited about the general concept, but also eagerly anticipate specific benefits from the project once it reaches more of its full potential in future years.

“Five benefits come to mind for agents and brokers,” says Bill Riss, CEO of Coldwell Banker Bain | Seal and UpstreamTM board member. “It reduces to one the times you enter data, being MLS-friendly. Second, you have control of where your content goes and of the rules of engagement. Third, we end what feels like a free-for-all on controlling intellectual property. Fourth, you can have a real conversation with your sellers on privacy because you can control it. Finally, you’ll be offered better products and services because vendors will now have one source with consistent language and data.”

“UpstreamTM is one of the brightest moments in organized real estate’s history,” says Rick Haase, president of Latter & Blum Inc./REALTORS® and UpstreamTM board member. “Data has leaked into areas it never should have. Brokers and agents remain individually liable for its accuracy. UpstreamTM represents the best opportunity for it to be placed with the care that our sellers and our fiduciary responsibility require.”

The founders formed a limited liability company that would own and run the project, making sure all ownership would remain with brokers and their representatives, now and in the future.

“The vision for UpstreamTM is one that is shared across our entire industry of real estate professionals,” says Robert Moline, president and CEO, Brokerage Division, of HomeServices of America and chairman of the UpstreamTM Board of Managers. “Agents and small brokerages stand to benefit greatly, as will all companies. Our LLC’s structure ensures every kind of real estate office will have a voice in the project going forward, as well as the opportunity to be a co-owner of UpstreamTM.”

The structure helps ensure the best interests of agents and brokers—and ultimately, consumers—are the focus of UpstreamTM, and that no size or type of real estate company has an advantage over another.

“Some mistakenly assume UpstreamTM unfairly benefits large companies,” says Geoff Lewis, president at the world headquarters of RE/MAX and UpstreamTM board member. “That is like thinking the highway system unfairly benefits Jay Leno because he has more cars. However, anyone with a car gets the full benefit of the highway system. Any broker with even a single dataset gets the full use and benefit of UpstreamTM. Everybody wins!”

O’Connor has a similar perspective. “As a network of brokerages of all sizes, LeadingRE sees significant data benefits for all brokers and agents,” she says. “For listing data, these include superior, consistent data quality, cost-saving efficiency, control over distribution and usage, and risk mitigation. And in future phases, other property-related and operational data in this warehouse will offer more possibilities, especially for small firms that wouldn’t have access to those kinds of resources without the entire industry building UpstreamTM for the common good.”

While Upstream’s components already exist, none have been deployed in this way, so work began in 2015 on modifying tools for the project. UpstreamTM interviewed many vendor applicants, all of whom were more than capable of tweaking their current products to fit Upstream’s vision. UpstreamTM ultimately negotiated a vendor contract withRealtors Property Resource® (RPR®).

NAR recognized the value of the project to the whole industry, saw the brokerage community was united and serious, and volunteered to fund the technology build until 2018. NAR made this gift to support its members and the industry, and did not receive any ownership in exchange.

At this printing, five markets are testing the first version of UpstreamTM,
watching to see how it handles input and editing of data compared to the programs the brokerages utilize. Those brokers’ MLSs are monitoring the flow of data into the MLS from UpstreamTM instead of the MLS’s add/edit software, looking at conversion into the MLS’s data format and compliance with the MLS’s business rules.

“There are many questions about how UpstreamTM will function for firms and MLSs,” Elsea says. “Many of those will be answered during testing. These pilot markets will also generate new ideas, questions and adjustments that will make UpstreamTM better, and implementation smoother for others.”

The ambitious vision for UpstreamTM will take years to realize. Initial implementation will include “listing” data for the most part, before the scope of types of data expands significantly.

“Brokers, agents, associations and MLSs should understand that UpstreamTM is our collective opportunity and we all should be making it happen,” Elsea continues. “It will be important to be patient with the process, as it will take time to map out and organize the details. Be sure to get involved, ask questions and make sure how UpstreamTM unfolds makes sense for you as a real estate practitioner and for your market in general.”

When initial tests yield positive results, the pilots will expand to more firms within those first markets and add other markets. Brokers interested in participating will soon be able to get in line by indicating their interest at UpstreamRE.com.

“MLSs can play an important role in supporting their dues-paying customers by helping UpstreamTM succeed,” says Haase.

UpstreamTM plans never to be an MLS. “MLS is a powerful concept that may have a database as a vital component, but a database does not define it,” Cheatham says. “Advance agreements for cooperation and compensation make it unique. Upstream’s founders intended for MLSs to continue to provide management of those, while UpstreamTM provides a data management tool for brokers and agents to use in addition to their MLS(s).”

UpstreamTM leaders have gone on record saying that MLSs will continue to manage IDX, as well. They also say UpstreamTM is a back-office solution, so there will not be any public-facing component, like a website to advertise properties. However, UpstreamTM intends to claim the comprehensive data management space.

“The solution must come from real estate practitioners themselves, working together,” says Cheatham. “Outside vendors have tried and will continue to try to develop and sell solutions. They have fallen short and will disappoint, just as efforts from just one brand or network have. If we utilize outside tools, we’ll end up where we are today—having our data held hostage, with agents and brokers beholden to an outside entity that does not have our best interests at heart.”

“There simply are too many forces that are not aligned with the best interests of brokers and agents,” says James Dwiggins, CEO of NextHome, Inc.

Brokers will continue to utilize other products and services of outside vendors, and those providers share the excitement about the possibilities of a world that includes UpstreamTM.

“We are excited about the prospects,” says Georg Gerstenfeld, vice president for DocuSign. “UpstreamTM has the potential to enable vendors like DocuSign to spend more time collaborating with the industry on usability, security and compliance—further accelerating the pace of innovation.”

“Vendors need data that is not in MLSs,” says Victor Lund, partner at WAV Group. “For example, vendors need broker and agent directories and branding. With UpstreamTM, not only will vendors be able to create accounts dynamically, but also to terminate them when personnel changes. This connection will ensure only authorized users access applications.”

UpstreamTM has made much progress utilizing volunteers, but its leadership expects to pick up the pace significantly with their first hire. Last month, Upstream’s Board of Managers announced they had reached an agreement with Alex Lange to fill the role of chief executive officer. It was an impressive hire for this fledgling organization, and signaled that real estate brokers are very serious about the project.

“Our Search Committee conducted an extensive, nationwide search utilizing Corporate Management Advisors to find a unique skill set,” says Cheatham. “The candidate needed a combination of industry experience, technical prowess, an entrepreneurial mindset, a track record of building relationships and consensus as well as proven success at growing successful businesses. That was a tall order, but Alex no doubt qualifies in every way.”

Lange has over 25 years of relevant experience. His success as co-founder of Roost.com, CTO of Market Leader, and, most recently, operating partner with the investment arm of NAR, gives him insight into every stakeholder connected by this initiative. As Upstream’s vendor develops the platform, his technical background—he was recently named one of the Global Top 1,000 Chief Technology Officers—will ensure the final product serves brokers and agents well.

“It’s such an incredible opportunity to move away from a competitive mindset and come together to create more time, resources and capacity for innovation,” says Lange. “Together, as an industry, we can build more compelling ways to serve our clients.”

Look for success stories to begin to emerge from the current round of testing, and for their frequency to increase over the next couple of years. If UpstreamTM achieves even a fraction of its potential, the real estate industry certainly will be changed for the better.

What is UpstreamTM?

  1. Software for entering and modifying data
  2. Secure, redundant off-site storage for data
  3. Platform for managing distribution and licensing
    of data

What problems does UpstreamTM plan to address?

  1. The same data must be entered multiple times
  2. Changes to data must be done multiple times
  3. Data can be difficult to get back from vendors/MLSs
  4. Data must go through a process of “normalization” for use
  5. Current databases contain only listing information
  6. Others sometimes make decisions for you about data use/display
  7. Copyright/ownership is being challenged with current methods
  8. Out-of-date and incorrect data remain in use externally

UpstreamRE, LLC Board of Managers

Robert Moline, Chairman; President & CEO, Brokerage Division, HomeServices of America
Dan Elsea, Vice Chairman; President of Brokerage Services, Real Estate One
Craig Cheatham, Secretary; President & CEO, The Realty Alliance
Jeff Detwiler, Treasurer; President & CEO, The Long & Foster Companies
Tom Salomone, President, National Association of REALTORS®
Steve Baird, President & CEO, Baird & Warner
Gino Blefari, CEO, HSF Affiliates
Joe Capriotti, President, Tenura Holdings/Private Label Realty
Curtiss Clemens, Vice President & Co-founder, Century 21 Clemens & Sons Realty
Rick Haase, President, Latter & Blum, Inc./REALTORS®
Kent Hanley, General Manager & EVP, William Raveis Real Estate
Joe Horning, President, Shorewest, REALTORS®
Tom Hosack, CEO/President, Northwood Realty
Geoff Lewis, President, RE/MAX Holdings, Inc.
Mark McLaughlin, CEO, Pacific Union International
Rei Mesa, Representative, National Association of REALTORS®;  President & CEO, Berkshire Hathaway HomeServices Florida Realty
Pam O’Connor, President & CEO, Leading Real Estate Companies of the World®
Charles Oppler, CEO, Prominent Properties Sotheby’s International Realty
Joe Rand, General Counsel & Managing Partner, Better Homes & Gardens Rand Realty
Bill Riss, Owner & CEO, Coldwell Banker Bain | Seal
Cary Sylvester, Vice President of Industry Development, Keller Williams

For more information, please visit UpstreamRE.com.

RISMedia


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