When the Algorithm Doesn’t Work

Zillow ended their iBuying program of buying homes and GeekWire wrote the following about it, Just because a business process can be automated, doesn’t necessarily mean it should be automated. And maybe — just maybe — there are components of business that are not better served with AI algorithms doing the job. “

I see this all the time in the buy-sell world, people wanting to slap on a formula to create a valuation. Yet formulas don’t always work because every business is made up of people, and people don’t always conform to what the formula wants.

Zillow’s model (the simple version) was to buy homes based on a formula, renovate them, and sell them at a profit. The Wall Street Journal reported the glitch was Zillow couldn’t renovate them “fast enough amid a shortage of contractors.”

There’s that people thing again. Let’s not forget people are what make a business, good or bad. Which is why the due diligence process in an acquisition, growth strategies, fixing a damaged company, and a lot more involve knowing more about and increasing productivity from the people.

“Time is the longest distance between two places.” Tennessee Williams 

“Time is the longest distance between two places.” Tennessee Williams 

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