The Insider: Issue 010

Substance and style. That’s what we’re doing here, folks. Let’s dig in!

Last Week This Week

A few things happened last week, but they seem darn small next to one big thing:

Rocket Companies, parent of Rocket Mortgage, released Q2 earnings, and, in so doing, signaled just how serious it is about real estate.

Rocket’s numbers, if you haven’t been following the company closely, are kind of insane: $1 billion in net income on $2.7 billion in revenue. That’s for the quarter. Rocket services 2.8 million mortgages and aims to be the #1 purchase mortgage lender in America by 2023.

The company has a $35 billion dollar market cap (Zillow, for comparison, is valued at $29 billion) and spent $905 million on marketing in 2019.

The company actually missed its guidance on both revenue and earnings per share on account of a challenging and volatile mortgage market this year. But that’s not really what interests us.

The big deal in the Q2 earnings, from our POV, was just how front and center its Rocket Homes play — which features an IDX-powered national home search portal, a discount real estate brokerage staffed with salaried agents, and an iBuyer program — colored the whole release. CEO Jay Farner opened the earnings call with a discussion about their real estate strategy and repeatedly revisited it as a key driver of future growth. Real estate is not Rocket’s side hustle. 

Oh, and another thing: Rocket is getting into the solar business. When someone buys a home with a Rocket mortgage, the company will help them assess the cost/benefit of solar, finance the cost, and coordinate with a local partner on installation. This is a significant “ecosystem” evolution that only a lender with deep experience offering diverse loan products could pull off. 

The net of it? Pay attention to Rocket like you pay attention to Zillow. Because they’re going to be competing fiercely to win the future.

Have You Heard About This?

'FOMO In, Panic Out'

This wild Reddit thread made us wonder how many buyers bought last year under the assumption they could work from home forever, but are now being summoned back to the office, many towns, or even states away. What happens when people have to choose between their new home and their job? (This would be a great one to discuss in our Inside Facebook group. We’d love to hear your experiences or thoughts.)

What's Inside

If you missed the Live Webinar last week where we dug into the opportunities in our Original Research report on Millennial renters, you can catch the replay Inside.

A brand new Smart Guide drops this week with insights on ways to tackle the tech adoption challenge.

If you haven’t watched Brian’s Spotlight Interview with Side CEO Guy Gal, well, you might want to. Guy is uncommonly candid in sharing his vision for his company and the future of the industry.

Inspiration Point

Two-Buck Chuck and the Rise of the Cult Grocery Store

When customers are so loyal you’d use words like “fanatic” or “cult” when talking about them, friends, you are witnessing the magic of superb branding. Trader Joe’s has such a brand. From its quirky product descriptions to famous $2 bottles of wine to friendly employees in Hawaiian shirts, this company has truly nailed branding (to the tune of $13.7 billion in net sales in 2019), which is why we’re sharing this story about how they do it. Enjoy!

There Are No Words

We often talk about the concept of “show, don’t tell” in marketing — meaning it’s many times much more powerful to show your product or service in action rather than explaining in words what you do. The ad above for FedEx is a red hot example of the brilliance of this approach.

Quote of the week

“Design is intelligence made visible.”

— Alina Wheeler