Glenn Sanford: Building the Future

Good Mike. Yeah.

The way I normally start my day is, you know, obviously get up, take my vitamins. I will take a look maybe at a couple email messages or workplace messages and then I look at what I have on my calendar for the day. So, that's kind of how I start each day. Of course, I know a little bit about what's going on the previous day, but I follow my calendar, you know, I jump into various virtual meetings, fewer than I used to, mainly because we've got such an amazing team now. And so I'm more in that sort of visionary role, but I'm, you know, reading the trade publications, seeing what's going on in the news. Not like anything's going on these days.

But yeah, so that's kind of the thing. And then I just stay available. So during the day people can reach me. We use workplace as a platform so they can message me, text message me, jump on a call. So I'm touching bases with a lot of people around the country. And then I travel a lot now too to a lot of different events. So like this next 14 days or so, I'll be going to about six or seven different EXP regionals. I'll be doing two investor conferences. And again, I'm able to do that because I've got such a great team in the background. So I don't have to be sort of hands-on day-to-day anymore.

Both, you know, because I travel at least two weeks or so a month, you know, I'm either bouncing between hotel rooms, coffee shops, Regus spaces, real estate offices. A lot of our agents have their own offices, so I'll do things there and I'll check in. But then when I'm home, it's actually kind of relaxing to be in one place and know exactly where the coffee maker is and how it works. And so I'll just sort of wander back and forth between my office and the coffee maker.

Well, I have a Jura which grinds and makes the espresso. So I pretty much do two to three Americanos a day when I'm drinking coffee. And I say when I'm drinking coffee because I go through about two weeks where I'm drinking coffee and about two weeks where I'm drinking green tea. So right now I'm in coffee mode.

One, there's always a push and pull. And what I mean by that is, especially in a down market, you've got a need to cut costs in order to maintain some level of profitability and cash flow. At the same time you need to invest in growth. And so you've got this in the last 18 months it's been a bit of push pull. So in 2022 we set out to reduce or take out about 20% of the cost of the business which we did. And then in January this year I got together with the team and said hey we need to actually quit cutting costs and go back on offense. And I think there's an ebb and flow to that. So we're coming back into, you know, a slower time in the cycle just being, you know, we're in Q4 now and Q4 and Q1 are the two slowest quarters in real estate and recognizing that, you know, there's still a need to cut costs when the market gets slower. So I think when the market gets slower, you have more of that push and pull around investments and cost cutting. Whereas when it's just grow, grow, grow, to some extent, you can't keep up with the growth relative to the expenses because you can't hire enough bodies. You can't bring in enough technology. And so to some extent, expenses are playing a little bit of catch-up. And then when you get to a sort of a static state or you start to slow down, then you recognize, oh yeah, we actually have to actually manage the business as a business.

A lot of it is really owning what's actually taking place in the marketplace. I'll give you a couple examples. Last quarter, we announced two initiatives. They were our Accelerate and our Boost initiatives. And Boost is an initiative where broker owners who want to convert to EXP, they would always come in and want some sort of special deal in order for them to make the jump to EXP. And with that, there was a lot of unintended consequences in getting them over. They needed an extra fee here. They wanted to sort of hide it from their agents that they brought over. We had to sort of cover for them in some capacity which was really not in integrity with what we wanted to do. And so really owning that we said why don't we just be overt and actually make this an actual program with parameters and people can talk about it. So that would be one where we looked at just what was going on and said why don't we just own it and then actually promote it as opposed to pretending like it's maybe not happening and then figuring out how to make it happen in the future. So I mean that's one type of innovation. Accelerate was another one where we just want to help agents get more productive faster. We just did an announcement actually I think came out earlier today on homehunter.global. And this is a really interesting product. I saw it a number of years ago I think at Inman and it's basically a browser extension that allows consumers to bookmark properties as they surf portal to portal. Now in the US and Canada it doesn't matter whose website you're on. This could be a realtor's website, a brand's website, Zillow, Realtor.com, Redfin, doesn't matter. You see exactly the same list of properties internationally. That doesn't take place. And there's all these portals and it's very expensive for agents to promote on these portals. And the light bulb went off that this was a tool that would be amazing for consumers that are stuck having to search four, five, six different websites in their local country just to find all the properties that might be for sale because of the way that advertising takes place there. So I think there's a fair bit that goes into I guess the brainstorming part. I'm a geek by nature which means I play with everything. I was plugging PDFs into the latest version of ChatGPT yesterday without any additional plugins just to see what would happen and see if I could get some good data out. We were doing some stuff around net promoter score, but for me, I just like playing with the tools and the tech because in my mind, there's a tool or a technology that's on the bleeding edge today that if we can adopt it sooner than our competition will give our agents an advantage. And a lot of times these things aren't very expensive, but for me, I love playing with the tools and the tech. So that'd be another thing that I do pretty regularly. I wouldn't say daily, but when I get on a path, like right now, it's a bit of an AI sort of bent. I'll play with lots of different tools. I just created my own avatar of myself and digitized my voice. And now you can actually create a digital version of me. I'm about to do it. So I can speak 24 languages with my own voice and my own avatar. So that's kind of a fun project. But you can think about it from the perspective of a company that's operating in already in 24 countries. And eventually we plan to be operating in 100 countries with all the different languages. We always have to be sort of thinking about how do we solve this problem that's right in front of us. And in most cases, the reason why we're trying to solve is because it hasn't been solved before, which means we always have to be in sort of that creative exploring innovation cycle.

That statement has been made about technology by many different very bright people in technology for many many years and without fail and I'm talking you know decades here without fail within a year or two or three there's some new technology that shows up that just changes the entire game. Right now we are in one of those fundamental shifts. And that's AI. The ability for AI to ultimately assist the agent, the brokerage, the consumer in ways to streamline that whole exercise, whether it be well, there's a lot of AI going on right now in the industry. And so this has been around for at least the last couple years where AI can actually look at the photos that are uploaded to the MLS and actually figure out what's going on well beyond the property descriptions. And in fact now really cool experiment if you want to try it if you haven't done it before is you know take a picture in your home using ChatGPT on your phone and then ask ChatGPT to describe it in a realtor's voice. It's pretty funny the results that you get out of it because it literally sounds like a real estate agent describing the open kitchen with the ornate moldings and all of this stuff and you think that for years an agent would type in something and then maybe if they're using like Jasper or whatever it would maybe come up with some description based on what they typed in. Now it's actually able to build your entire property descriptions, your marketing plans. Probably create your task list for your assistants. Eventually those task lists will be APIs that will connect to other systems. And I see sort of the AI piece being just the game changer that blows that statement out of the water because it's going to rewrite everything that it means to be a real estate professional in my opinion.

For exactly the reason they won't use their CRM. But if they can have an assistant, conversational assistant actually remind them, touch base with them, add data entry, actually do the CRM stuff for them without them having to sit in front of their keyboard, get blurry eyed looking at the piece of paper that they're typing in data into the CRM, setting the action plan, and trying to figure out which action plan do I want to send them? Are they a buyer, short-term, long-term, out of area? No phone number, whatever, and the AI will just do it. That's really the dream CRM. Like AI really does replace CRM. And we think about CRM there's also three different CRM that agents use. Three really. They use a CRM, an actual CRM. So whether it be Follow-up Boss or KV Core or whatever. There's their phone and just their regular messaging back and forth via their text messaging and phone. And then there's the social CRM which is Facebook, LinkedIn, Instagram. And the reality is a lot of people don't call those CRM, but more business for a lot of agents is generated through their social media that they'll never need to touch a traditional CRM. Yet, we don't call social media CRM. So agents figure out how to do business whether it's a CRM or not. And then if you sort of fast forward a little bit further and you think about where does AI sit in this mix. Well, it's going to connect to all three of those and it's going to be this sort of middleware that's going to keep everything up to date.

I've always referred to myself as I'm jaded about a lot of things. I'm jaded about people. I'm jaded about myself. Meaning that left to my own devices, I'll screw anything up. And I think about that in the context of real estate agents as well. So that's why we created EXP in the way that we created it is I fundamentally recognize that most real estate agents are not business people, never will be, don't have the acumen for it or certainly not the desire for it. They don't have the bandwidth that it takes to actually run it truly as a business. So, how do you then go about creating a model that gives them the benefits of business ownership without them having to go through the brain damage of business ownership? And we judge agents to a large extent by how many transactions do they do? How much GCI did they create? And I think real estate agents really they're like, 'Hey, I need to put some deals together because I need to pay some bills.' And that's the vast majority of them. And the vast majority of them that have been in the business for more than two or three years, they figure out how to do enough deals to put food on the table, a roof over their head, and take a couple vacations. And if you sort of think about it from that perspective, they're doing exactly what it was that they set out to do. Of course, you talk to industry people, they go, 'Yeah, the real estate industry should only have about a quarter of the agents that are in the industry. Most of them are professional.' But the reality is that this industry provides a platform for a lot of agents to do what they need to do when maybe they're not as well suited to chase the corporate dream up a corporate ladder or because of dynamics, maybe they're stay at home, they're not in a place where there's lots of opportunities, they can still go out and be in the real estate business. So for me, I think about real estate agents in general as doing what it takes to put business together for their personal needs. And then you've got the superstar agents, which is that 2, 3, 4% of agents that will really run this like a business.

What I do see is that agents themselves, I think, feel like the business is a good business to be in because one, they're in it. But I think a lot of them are also frustrated about the inability to truly get ahead. And I think that's fundamental to lots of different businesses, people in different industries, whether they be on the front lines of whatever. It could be a Walmart or a Nordstrom's or what have you. And so for me, I just tend to think, what can we do to put something in place that can give them more opportunities than they would get somewhere else? And when they recognize those opportunities, then occasionally, and actually it happens quite a bit, they'll actually get really excited about the fact that this business no longer feels like a dead end. And so that is really beneficial and powerful. And actually, it's one of the reasons why I keep on doing what I do is because I love to see that transformation for agents who were struggling to pay their rent and now they've actually bought a house or they never knew they were going to be able to send their kids to college and because of the way that we set up the model, they start to see the opportunity. Then they work harder because they actually see something that actually makes sense that they can actually strive to build.

Well, I mean fundamentally the very first one was when we launched. Nobody had done a at the time there were virtual real estate companies and there were some but they are 100% based companies. They charge a flat fee. They're very inexpensive for agents to hang their license at. So there are no frills companies and that was basically it. And so we came in and said that model doesn't work for the agent, doesn't work for the broker owner because there's not enough money for what I called leadership. And so going entirely cloud-based or virtual or as we referred to ourselves as the world's first fully immersive web 3.0 real estate brokers. That was our tagline in 2009. Being a cap and split model and then passing on some of the savings in running without bricks and mortar to our agents in the form of our revshare and eventually the equity program. It did absolutely run counter to what people are thinking. Even today, you look at what took place in COVID and you saw all these individuals in corporate America that started work from home because they had to. And the fact is that the mainstream CEOs and people who run large enterprises, they're bringing all of their workers back to an office. They're trying to. And whether it be Elon Musk or Apple or Microsoft, most of the tech companies are attempting to get everybody back. And I think that there's still this fundamental belief in residential real estate that you can't really run a real estate brokerage without physical offices. You know, I think you mentioned Robert Refkin was here a week ago and that's a very bricks and mortar heavy business. And so you've got people on both ends. And by the way, nobody's right. Like I'm right for a section of the industry, he's right for a section of the industry. I actually believe that there's a reason to pursue it. But what I still notice is that there's still a significant amount of the industry that doesn't actually believe that a cloud-based virtual real estate brokerage will work even though the fastest currently fastest growing real estate brokerages in the industry are all cloud-based.