If you hang out in the circles we do, you probably hear the word ‘disruption’ pretty often. And we’re the first to agree that it’s overused—especially by the Patagonia-wearing Airpods-in-the-Uber crowd.
But sometimes, the breakthrough is real. Sometimes, the game really changes.
Today, we’re going to tell some stories about the companies who are changing the game across industries.
In some ways, changing the world is easy: you do it one small piece at a time. And it isn’t like lots of the pieces aren’t worth changing. Twenty years ago, legacy institutions abounded in pretty much every sector—from banking and finance to transportation and housing to entertainment media. On the one hand, those institutions stood the test of time because they got lots of things right. They created value for their customers and for society, and people were mostly happy to buy their goods and use their services.
But “that’s how it’s always been” isn’t an especially good reason to avoid change. And there’s a reason so many legacy players have been disrupted: good as they sometimes were, they also had major problems.
The advent of ‘tech’ as a discrete business category tells a big part of the story. Since 2007—the year the first iPhone came out—our civilization has been on a collision course with history. And in many ways, our quality of life has improved immeasurably. Sure, there were rough patches (this writer still remembers trying to clean a DVD Netflix shipped through the mail back when that was a thing). But by and large, all of us can now do things our ancestors could barely dream of. Your phone has more processing power than the Space Shuttle; you can use your couch to recharge your portable library; you can summon burritos at 2:00 a.m. by literally lifting a finger.
With that technological revolution comes big opportunities. Tech-savvy innovators have realized they can leverage new technologies to bring the revolution to old, established industries—and in some cases remake them in a few short years.
Consider a few examples:
The people who came up with Uber followed a familiar pattern:
Identify an inefficiency → create incentives for crowdsourcing to solve the problem, → generate profit by operating the exchange where buyers meet sellers.
The inefficiency Uber capitalized on was cars. The United States alone has nearly 300 million of them. For 330 million people, 290 million cars is a lot. But those cars are parked about 95% of the time. Yet for lots of us, finding a ride used to be tricky—especially in places without well-established taxi services. Meanwhile, there’s lots of people who would happily exchange a few hours per week of their free time for some extra cash.
That two-way inefficiency was the key to Uber’s success. Lots of cars and would-be drivers with no way to use their time and stuff to make money, and lots of people willing to pay for rides. Put differently, they found a demand-side surplus matched with a supply-side deficit, and a surplus resource they could use to make up the supply shortage.
The only problem: how do you incentivize the people holding the surplus—free time and unused cars—to meet the demand? Easy answer, because it’s the reason people do most of the work they do: offer to pay them.
By creating a virtual marketplace—accessible by anyone with a smartphone—Uber found a way to pair off buyers and sellers and match their incentives with innovative pricing schemes that rewarded drivers for working during peak hours and discouraged riders from consuming resources unnecessarily.
It was a brilliant scheme, and it took only a few years to completely revolutionize the way we think about transportation. And it does it all with far less waste than the alternative: consider, as one easy example, that every time you Uber in a city, you consume one less parking space. And when you Uber with a group, you save gas and cut back on emissions.
And it’s not just transportation: the same basic pattern applies to dozens of other amazing apps. Consider the basic formula again:
That formula’s worked out for tons of game-changing services: consider Doordash, Airbnb, Hotels.com, Postmates, and others.
What Uber did for transportation, Robinhood did for traditional securities investment. Before Robinhood, buying stocks was a complicated matter. Even with the advent of e-trading platforms offered by legacy players—think TD Ameritrade, for instance—it was a hard business to get into. Most of the high-end investments—like hedge funds, options trading, forex, etc.—simply weren’t available to retail investors. And investing itself was a time-consuming, needlessly complicated task dominated by complicated desktop applications and huge stacks of paperwork.
Robinhood’s innovation followed the same basic pattern as Uber’s. First, they identified an inefficiency. On the demand side, lots of retail investors were interested in investing but intimidated by or locked out of the systems in existence. On the supply side, lots of investments were happy to get more funding. The problem: no platform was ready and able to connect those two groups.
So Robinhood created one. The platform’s zero commission fees, fractional ownership features, user-friendly app, beginner-friendly tutorials, and built-in research services made it easy for retail investors to feel confident buying stock. And by directing more investment towards projects that needed it, Robinhood helped meet a supply-side need too: it’s not like there wasn’t room for retail investors to get in on the market—there just wasn’t a platform ready to connect their capital with solid investment options.
And by providing an intuitive, accessible, mobile-first platform that paired buyers with sellers, Robinhood was able to earn some profits on the endeavor. Almost like magic, the formula worked again—and it changed the game for would-be stock investors.
Right now, dear reader. We’re sure you saw where this was going.
If you’ve hung around this blog for a while, you know our basic thesis: real estate investment has historically been available only to the super-wealthy, yet everyone has good reason to want to invest in real estate because of its world-beating risk-adjusted returns.
Reiturn is all about solving that problem. Like with Uber and Robinhood, everybody’s pretty much on board with the fact that real estate investment—like transportation and stocks—is nice to have.
The problem is inefficiency. On one hand, there’s a surplus of demand for good real estate investments. Lots of people want in on the real estate space. On the other hand, there’s a shortage of good options. Direct investment is viable, but far too time-consuming and skill-intensive for the average investor. Private equity is off-limits to everyone but accredited (read: super rich) investors. And traditional REITs are a pretty hit-or-miss proposition, vulnerable to the volatility faced by any exchange-traded security.
But there’s no good reason for that supply shortage. After all, the world is literally full of real estate. And viable investment opportunities abound, especially in underutilized markets like many Heartland cities.
Reiturn is here to create an intuitive, easy-to-use platform that blows up the barriers that traditionally kept retail investors out of the real estate game. With a low $500 minimum investment, beginner-friendly educational resources, low risk, and high returns, there’s plenty about Reiturn to meet the demand surplus. And Reiturn also has a prime window into the supply-side surplus: as we’ve written about a million times on this site, Heartland real estate in general—and workforce housing in particular—is a wide-open asset class boasting lower risk, potential high returns, and tons of headroom for capturing economic growth and improving margins with a capital-light value-add strategy.
By connecting retail investors’ capital with those juicy properties’ earning potential, Reiturn is going to change the real estate game.
Sound like a bold ambition? Good. We won’t apologize for it. We’re here to change the game and bring real estate investing to the masses. And we’d love to have you along for the ride.