Coffeez with Joe Shalaby - Real Entrepreneurship Spirit with Sharran Srivatsaa | Coffeez for Closers Ep. 1

Episode Date: January 5, 2024

Join us in this enlightening episode of "Coffee's for Closers," where host Joseph Shalaby welcomes Sharran Srivatsaa, an extraordinary leader and the President of Real (NASDAQ: REAX). A former Goldman Sachs and Credit Suisse banker, Sharran is not just a business maven but also a key voice in the world of entrepreneurship. In our conversation, Sharran dives deep into the core principles of successful leadership and the strategies for running a company efficiently. His wealth of experience in taking companies public and driving growth is a goldmine for anyone aspiring to excel in the corporate world.From discussing the intricacies of corporate management to sharing insights on optimizing business operations, Sharran provides practical, real-world advice that’s essential for modern business leaders and entrepreneurs.Welcome to "Coffee's for Closers," a podcast that brings the heart and expertise of a family-owned business to the forefront of entrepreneurial and business discussions. Hosted by Joseph Shalaby, Broker and CEO of E Mortgage Capital Inc., this show delves into the world of business with the warmth and wisdom that only comes from a leader who has built a successful company from the ground up with close friends and colleagues.Each episode, Joseph Shalaby draws on his own experiences and those of his esteemed guests to explore topics ranging from effective leadership and teamwork to innovative business strategies and industry insights. Whether you're a professional in the mortgage industry, an aspiring entrepreneur, or simply interested in the intricacies of running a successful business, "Coffee's for Closers" promises enriching conversations and invaluable lessons.Advertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

What's up, everybody. Welcome to Coffees for Closers, a show about visionaries, entrepreneurs, and of course, closers. Here we talk about their wins, their failures, and ultimately the story of their success. How up everybody. Welcome to the first kickoff for coffees for closers podcast hosted by me, Joe Chalby, founder and CEO of eMortgage Capital. I'll be kicking the Coffes for Closers podcast off. We'll be doing this weekly. A lot of great guests, a lot of fun stuff, a lot of great topics. And most importantly, you're going to be able to gain a lot of insight and knowledge and things that you can immediately implement in your business that are going to help you win now. So without further ado, I'm really, really excited. Our first guest, shout on Srivata, the CEO of Real Real Estate. That's NASDAX symbol, R-E-A-X.

So Real Real Estate, they got 14,000 real estate agents right now. they got a massive national footprint. They're growing every single month, like with astounding numbers. Their stock ticker is climbing. Great stock. Sharon Srivata is the president of Real Real Estate, the chairman of ARC multifamily. And actually, I'm a big investor in ARC myself. I'm invested in many of their multifamily projects.

So great, great guy. He is also the host of the Business School podcast, where he basically, we'll literally coach you for one straight hour. Brilliant guy, visionary in the industry. And one of the things we're going to dive into is he's the creator of the 5 AM club. And that's an incredible feat that he's actually created. And it has over 8,000 people that tune into that every single day. So without further ado, shout on Srivata.

Let's take it away. I'm so stoked that you're here. And you've got so many projects underway. So we're going to dive into it. But you had five exits. What's the exit that you're most proud of? So the first one is the one that I'm most proud of. It was a technology company.

The craziest story how this happened was I was a computer science math major at college. And when I was done, I was in a programming contest. I was a nerd. I was in a programming contest at UC Berkeley. And I finished presenting on stage. And one of the judges comes up to me after, and he's like, hey, kid, you're not going to win. I'm like, oh, man, thank you. He's like, but the project that you talked about, I actually funded two other guys.

I think what you have created would be a great addition for them. And so he connected me with them. That was our first company. We raised, you know, tens of millions of dollars on Sandhill Road. And then that got acquired by Sienna, which is publicly traded. So a chance meeting where I presented at a programming contest that led to me joining a company and using the thing that I'd built as my senior paper to then actually. build something that is live in the world today.

That's amazing. What is that company? It was called Light Era, and I was acquired by Sienna. Light Era, what did it do? We built optical switches, optical networking, big boxes, so we competed with the Cisco's and the red box of the world. So you were a programmer by trade. That's like your niche.

Yeah. That's awesome. And so you're most proud of that because of just the chance that just introduced you to, you know, the entrepreneur spirit. Yeah. And understanding that, you know, being at the right place at the right time. and just innovating at like lightning speed at the time. Well, I'll tell you that there's two deeper benefits from that.

Benefit number one is I didn't know anything about building a business or raising money or how comp structures work. When the exit happened, I thought I was getting this much, but I actually got this much. And I was like, why did I get like a one full zero less? Why was that? Because there was a clause in my contract on a ratchet. and it's a delusion preference, which I had no idea about. And this was the olden days where you didn't even have online bank accounts. It was 2001 on the exit.

And I remember going to a Bank of America ATM when the wirehead. And I would like, summary statement. I'm really like, it's not hit yet. Summary statement, it's not hit yet. Summary statement, it's not hit yet. I would do like seven, eight times that day. And then finally, like, that zero is off. And that's what made me realize that I need to learn business in a whole different way,

how what contracts actually mean. So that taught me that the hard way. But at the same time, the judge in that place had invested in me and supported me is still my partner today. So 20 plus years later, he took me under his wing. He got me that introduction. And we've been partners in several companies

from that day all the way to today. So I built a relationship with one person who has been an amazing mentor to me. You know, sometimes like those big losses, but the relationships that you build through those losses are priceless. Yeah. Yeah, I could never go back and recreate that. What happened there taught me more about business than anything else because a lot of people get good early exits along the way and they think it's like that all the time, but it's not. But learning it that way now allows me to

realize when I invest in a founder, I'm like, hey man, I know what a dilution is. I'm not going to screw them that way, like how it happened to me. So it made me think a lot about how to be a better investor too. So do you invest now in your angel investor? Yeah, so we have a we have an angel investing arm we have we have made like 24 25 investments over the last 10 plus years most of these companies need follow-on round so as soon as you make one we've realized that whatever we commit to one we double our investment because we know that there's never not one time been a company that we've written one check into that have actually said oh yeah we're done that's never happened so we always say hey we're going to write one check and we're going to double it because we know that's going to be

the follow-on round so have any exited have you had any big exits out of any of those multiple several have had private exits, but one of the 25 went public. So, which was a good win for all of us. That took care of portfolio theory. That took care of everyone. So is it true? Like when you have these kind of one company basically pays for all your 20? It does, but it would be great to have two, three.

Correct, but it does. But the problem is, I will tell you, so there's this legendary investor. His name is Fred Wilson in New York City. And he always asked, the first time I met with him as an angel, when I got my first set of cash, I was like, hey, I want to be an angel VC. He goes, okay, I'll meet with you. He met with me for 15 minutes. He's legendary.

And I asked him, so what's the secret? He goes, when you know that after you've deployed all your cash and you still want to keep going, that's when you're a true investor. And I was like, what in the world are you talking about? He goes, you're going to make 15, 20 investments thinking you're a hot shot. And after none of them are going to pan out, maybe one will. And then will you stop or will you keep going? That's what makes a good investment. So the first for 10 years, I was just writing checks.

Like, I had no idea. I was trying the best that I could. But now I'm a significantly better investor because I kept going. And you learn stuff the hard way. It takes a while. The longevity of the investor game is more important than picking winners. It's super hard to pick winners. You know, that sounds like the essence of the entrepreneur spirit, right?

The essence of the entrepreneur spirit is just to push beyond. And what I've even realized, even with this. With this company in like 22, 22, 23, some of the tough times we had over with the rate spikes is like, I'm willing to go and go all in and be broke and do this with and I don't care if I make money. Yeah. Well, see, that's a really interesting thing, right? Real estate agents, mortgage brokers, why do they get into the game? They get in the game for two big reasons. One, they have full control over their time.

So you have time flexibility. And two, they have unlimited income potential. Well, when you get extreme time flexibility and, you. extreme income potential, what you get for half the population is laziness. That's the problem, right? When you have unlimited, uncap potential, something dramatically changes. So what do you actually need for it to happen? The need is not, the need is playing the infinite game. The game is not to win. The game is to keep staying in the game. And when people realize that, like great entrepreneurs, like you realize that, I think the way we do it well, the way you do it well, is like you freeze

lifestyle. You're like, hey, I'll take less capital. I'll take less cash flow. But I'm not going and buying four Maseratis, but I'm going to freeze, freeze income, right? No, it's a winning mentality. I don't care what it is. I just want to win. Yeah. And the drive that you have when you're an entrepreneur and you're like, to your point, and when you have extra time, laziness is like so immense between our two organizations.

It's like everybody, you know, the average loan officer, the average realtor is just immensely lazy, or they just know how to be leisurely. be a good way to describe it. I actually have a deeper feeling around that. So if you're a real estate agent or a mortgage loan officer, listen up on this one, right? It's not that you're lazy. It's actually the deepest spirit of entrepreneurship. It's the fact that you don't know what to do next.

That is the problem. And most people, coaches, consultants in our space, are very, I'm going to push coaching so that you sign up for a $1,000 a month package with me. Instead of some, if they sat down with you for 15 minutes and you said, hey, here's your plan. and they just did those things. They would win hand over fist. Most of the time, they just don't know what to do.

Like, I would tell, like, yesterday I wrote an email to our entire company, and I said, send this email to everyone in your database. I was like, don't change anything. You know what they will do? They will change it. And I said, if you change stuff, you will change the result. Copy paste and send this exact same thing. And whoever copy paste it and sent it and sending me screenshot of a, man,

I got like eight responses, nine responses, 14 responses. And I'm like, yeah, you got to find a way to not put your pink font and actually, like, do the things at work. And so when someone gives you like a playbook that works, have the courage to do it as opposed to saying, oh, I want to do it my way. Shut on, you sound like me. Like I literally with my loan officers, I'll be like, here's exactly the data. Here's exactly the message. Here's exactly the cadence of messaging to go out.

Copy this. Implement this. It's bulletproof. How did you mess this up? I don't understand. Let's do tactical stuff. I'll give you two really interesting examples, right? There's two emails that works.

emails or tax that work for a loan officer and for a real estate agent. The number one email that can work for a local estate agent is this. The email is, are you still interested in buying a home in blank? Are you still interested in buying a home in Orange County? Question mark, send. That is the number one performing email you can send. Not like, hi, Joe, remember I met you on one, two, three, banana street? None of that.

Are you still interested in buying a home in Orange County? Question mark, send. That is the number one response on the email that you get right now for a real estate agent. Number one. The second, and I would send that once a quarter. The second for a loan officer, the number one response for a loan officer, And even for our agents is, hey, would you like me to let you know when the rates drop below 5.5%? 6.5%.

Whatever the number is. That's all you're asking. Because now the person that responds to that activates and says, oh, yeah, I am interested in that because now you have a conditional buyer. If I have real estate agents sending out the LO email, I have real estate agents that are saying, hey, Mr. Mrs. Client, would you like me to let you know when rates drop below 7%. That is generating more leads for an agent because now they know that they're conditionally responsive to They're buying a mortgage payment, right? So I always tell people, consumers don't buy homes.

They buy monthly payments. So our job is to at least know where that condition lies. And every piece of communication should be tied to that. And then you get a significantly more bang for your buck from the leads. You have great lead strategy. I mean, we have a lot, even in the mortgage space to learn from you. I mean, where did you, coming from the tech space, understand the psychology of sales? How did you even get introduced to that?

Because that wasn't your forte. No, not at all. So I learned, I got a million dollar sales education because after, so I went to business school and then I went, I was a banker at Goldman Sachs. And so I was on the Goldman floor. So I did, we were 33 MBAs that got in my year that year was 2008, middle of the financial crisis, 33 MBAs that got to Goldman. I had 39 one-on-one interviews to get the job at Goldman, 39 individual one-on-one interviews.

Wow. So, but at Goldman, our first six months were. in New York and it was straight training. I'll tell you what happened. My first day on the job, they hand you a Blackberry those days, a no limit amex, corporate card, and a headset. And I was like, what is the headset for?

So the managing partner tells me, put the headset on, don't plug it into anything. I want you to get used to that as a part of your body. Like, think about the craziness associated with that. That's still part of my body. When I come home, when I used to come home after Goldman, my wife be like, hey, you had a long day. And there was the line on my hair.

with the headset, with the band. But that's important because... They wrap around your head now, so you don't get that light. But I still have the same exact headset, which goes over my head. But the crazy part is you learn skills, right? Everything is a skill. And I remember the time where we were calling on CEOs and CFOs of big companies. And two months into training, managing partner walks in.

He says, all right, who was this birthday in January? Like six people stand up? He goes, come on up. One person comes up. He stand in front of the class. They hit a button. Goldman's CRM pops up. It has CEO of eMorgage capital, Joe Shelby, right there, right?

With phone number, et cetera. He's like, call. I'm like, what the heck? So you're calling in front of the class. Like, think about the pressure associated with that. Wow. Right? And Goldman is some serious boot camp.

You have the managing partner sitting right there saying, call. Right? And all I said was, so when my turn came up, I was like, hey, I will make as many calls you want, not only to people in here, but in a phone book, whatever, I'll make all the calls. Can someone give me a script? Like, what do I say? And then the managing partner starts laughing.

He goes, the first person to actually ask for a script. I was like, I'm not making it up. Like, someone has gone before me and done it right. And I think the skills are important. There's no reason for us to figure it all out. It's all the sales training I learned. Most of the foundational stuff happened at Goldman. Like the skills, the scripting, the tonality.

actually practicing framing and leading people through the process, doing a consultative selling. All of it happened at Goldman. Wow. Yeah. And it's really like they don't have like a routine like we actually have sales coaching here. I got I got a guy who comes in and trains them with like NLP sales strategy. They didn't have any of that at Goldman. No, it was close enough though. They, it was very functional where they would teach, they would teach you how to approach a client.

They would teach you how to use soft language. they would teach you how to frame each conversation. They would say, hey, you don't say, where are the cheapest solution. You say you're the most efficient solution. Like, small things like that are tremendously helpful, right? The greatest phrase that I learned from the CEO of Goldman Sachs, at that time, his name was Lloyd Blankfein. He said, the limits of your language are the limits of your world.

And so everything is very language-based. And he goes, if you can't spend the five minutes practicing the language, how do you expect the client to trust you? And so it's super powerful. So I'll give you the craziest real estate story. When I got in the real estate business, I knew nothing about real estate. I was like, I made investments. I owned my home.

That's all I had. And I hired a coach. And the coach said to me, he goes, hey, if I were you, I would do something that no other owner of a company has done. So I memorized the listing and buyer agreements, word for word. And so now when I'm in a listing appointment with the client, I'd be like, hey, Section 9A of arbitration talks about this. And I would recite it completely memorized. Right? And so the client would be like, how do you know this?

I was like, how should I, I need to know this to protect you. And that's what generated so much, so much knowledge because, and I'll tell you how I did it. I took the document, I read it, I recorded my computer. I put an MP3 player during those days. And I just played it on my drive up and down the 4 or 5. Just memorize the entire contract. You're a brilliant student, you know, you just, you just, it comes in your DNA just being Indian, you were supposed to be a doctor.

I know because I'm Egyptian. So it's the same thing. We went through the same thing. I did that in law school. I had to do the same thing you did. But from a, when you know you can get a skill, I think a lot of salespeople, both real estate agents and MLOs think that, hey, I'm an outgoing person. I have a high D personality.

I can sell. That's not it. When you have skill, then you can sell. And that's the cool part. So skill is super important. You know, there's a couple things. There's skill. There's grit.

you know and you have to have both and you have to have ingenuity people are like well someone was talking to me the day and they're like well why are you successful like I work really really hard too like I just don't as an entrepreneur like well working hard's not not the only solution like working hard is a big part of it but how how much are you willing to sacrifice you know and are you willing to outwork everybody yeah and like can you out think them are you out can you outsmart them yeah there's you know there's a A lot of times I look back and I'm thinking about, like, is there a formula for success, right? And I think there's three big pieces.

And the nice part, folks that are connected to your organization, you support them significant. I'll tell you what those pieces are. So if you take a triangle and you think about three sides to it, there's opportunity, number one. So if there's not a lot of, if you're super skilled and you don't have anybody to like talk to, that's really hard. So opportunity, call it leads, call it people that you're talking to. The second is effort. And the third is skill. So even if you provide training, so you're providing skill to people, you're providing opportunity

people, they still have to do the work. But the nice part is great companies like yours provide opportunity and skill. And all that the sales professional has to bring to the table is the training, is the effort. And so I always ask, is this an opportunity problem? Is this an effort problem or is this a skill problem? It's a very quick diagnosis. And if you can be really honest with yourself, you'll figure out what the problem is. You know, we try to present the opportunity.

We try to mitigate the skill needed. Try to mitigate the effort needed. But at the end of the day, you know, even through all those strategies, like, we, you know, we still need significant effort. Yeah. We still need you bought in. Yeah, of course. I want to talk because I don't, I want to, and people want to know, like, so you sold tell us real estate. You had that exit.

First off, how did that happen? happened. And then we all want to know about real. Yeah, yeah, of course. So the coolest story how this happened was I was a banker in New York and my partner who has been my mentor said to me, he's like, hey, there's this small company in Beverly Hills. It has one office and a few agents. Do you want to invest in it? I was like, I don't know anything about running a real estate company in Beverly Hills. I live in New York City. But if you're in it, I'm in it because I'm partners with you. So I was a passive investor in Tell Us when it started. And then one day I got quarterly statements.

I was like, huh, this doesn't look, this looks strange. And so I found the P&L, and I was like, it looks, this doesn't look right. And so I talked to the CPN, he's like, we found that the then CEO was embezzling. And so I was like, all right, well, now it's my fiduciary responsibility

to not allow this to happen. So me and my partner met with the CEO and bought him out. And I took a six-week leave of absence from banking to do this. And I said, well, my job is over the next six weeks to stabilize the organization to find a CEO so I can go back to banking. Well, you're going to laugh when I tell you the story. I had a simple model.

And my model was, all right, we're doing roughly 300-ish million in gross sales volume. And I accidentally put a zero. So it became $3 billion. And suddenly I was like, what just happened to the P&L? And the model just changed. So I was like, wait a minute. The vision. It was by accident.

So then I told the board, I was like, hey, I will resign from banking. I will come run this business, but we're going to do 10x in five years. And they're like, how? And they're like, well, we don't have any money to pay you. I'm like, I don't need money. I bought my equity because we bought this other guy out. I will build and grow this business. So we went from one office, 33 agents, to 22 offices, 700 agents in five years.

And then sold a business to Douglas Ellman, which is publicly traded out in New York. And Ellman wanted a California-based footprint. Now, here's the key behind how we did that. as a investment banker, I didn't know what our business was ever worth. So every summer, I would shop the business softly. So I would go to the three, four big suitors, and I'd say, hey, here's our stuff. And they'll say, hey, we'll pay you. I'm making up numbers.

Hey, we'll pay you $50 million for this. And I said, thank you. So now I know their model. I said, well, what if I wanted 100? They said, well, if you want 100, it needs to have ABCDE. I'm like, great, thank you. So I took the ABCDE, handed it to my CEO, that became the business plan for next year. I did the same thing next summer.

I said, oh, it's worth 100 now. Good job, Sharon. Hey, what if I want 150? Well, if you do A, B, C, D, E, it'll be 150. I'm like, thank you so much. I took that. Handed it to my sale. That was the business plan for next year.

We did that for three years in a row. I need to go over my business plan with you here. But what founders do is they think that that becomes the plan, right? But they don't realize it from a mark to market from who the potential buyer would be. That's way more exciting. Because now I can go back to them and say, for three years in a row, You told me I built, you told me I built. You told me I built. And I'm working off of their model. So having these conversations became really easy because they knew that whatever they say I was going to do, I was going to do.

And then the offer from Doug Seldman came, which made it really easy. But shopping the business every year made us have a much tighter business. That's just truly insightful. Like I never even thought to shop my business. I don't ever want to sell it, but it would be. Of course. it would be good to know like, you know, how many billions would it be worth if I did X? No, totally, right? But I think that's important because it forced all of us. It forces us to know where we stand because we are on someone else's scale. Diagnostic first, right?

Diagnostic is really important because when we walk into a doctor, they just don't start diagnosing us. They're like, hey, does this hurt, does that hurt? Does this work? Does that work? That's very prevalent across every business. That's why even when I'm talking to a real estate agent or MLO, I'm like, hey, is this? Is this an opportunity problem? Is this an effort problem or a skill problem?

I can dice it out very quickly. If it's an effort problem, I'm like, hey, what kind of business hours do you keep? That's a standard question. Like, what do you mean? I'm like, okay, so you don't keep any business hours? That's the problem. Because you just wake up. And if you have work today, great.

If you don't have work today, great. And that's the problem for a lot of people. If you can find a way to diagnose this stuff quickly, then success is like just around the corner. I mean, like your salesmanship, your vision in sales is like, it really is just another level. So I want to dive into how you've been able to do it with Real. Like you've been able to take Tellis, you sold it, Stellas Elman, great. I'm sure it was it was a good exit, but what it did was it positioned you to start to be the

president of Real. So are you the president of CEO? The president of Real. President of Real. Is there a CEO? Yeah, there's a founder. There's a founder. Yeah.

Who's amazing. He and I have awesome partnership. Awesome. So, and you're, I'm sure, a pretty decent equity. shareholder in Real. So how were you appointed as the president of Real? And then also like, and then I'm going to talk about some of the vision because you got some immense vision for 2024.

Yeah. So how it all happened was after we made our sale to Douglas Solomon, I had a five-year non-compete. And so I sat on my hands for five years. So I did two things during that time. Thing number one was since I could not work in the real estate business in the U.S., I helped real estate businesses in Australia and New Zealand. Oh, that's cool.

And so I got a chance to do that for a few years. You have a non-compete here in force? in California? It was across our wherever the TELUS footprint was. So it was, and I wanted to respect that. I mean, they paid me to set on the sideline. So I was very happy to do that. And then while my non-compete was coming to an end, I got a chance to, I've been consulting with several big real estate teams in the U.S. And many of them were interested in going, leaving brokerages, switching brokerages. And I said, hey, if you want to go somewhere, I want to make sure I get connected with who the top players are. So I reached out to Real and said, hey, I've got several

teams that want to move to Real that I advise, let's have a conversation. So that's how I got to know the Real platform. And then that's how I met the founder of Real and he was like, hey, what would it take for you to potentially come out of retirement to do something like this? And I said, well, I want to run the business. I don't want to talk to Wall Street. Like I've done my Wall Street thing. I just want to build and grow the listed business. And he says, well, I'll take care of that and you take care of this. I was like, that's a great partnership. So we get a chance to really work together. I grow the business. And so everything that is, quote, real broker is mine. But I don't do a lot. So your founder does all the ops.

You do all the sales, all the visionary stuff. He's amazing. He does all of the public-grated Wall Street functions, which is a lot, by the way. Yeah. Which is a lot. Like, I would not want to, like, hey, I'm like, where are you today? He's like in Milwaukee at an analyst conduct. I'm like, oh, my God, how do you do this stuff?

And the reporting requirements, the working with the board, the audit committee, it's a, the cost of being public is a lot, but it also gives you a lot of benefits, which is powerful. But the running of all our operations, essentially it is growth, our C-O function, our CMO function, all our brokerage functions, they're all buying. Wow. So what's, so we're coming short on time. So I want to make sure that we go through your vision for 2024. Yeah.

And what do you think, you know, for people who are buying REAX right now? It's tough. So a lot of this is material and non-public information. No, no, I'm just kidding. But really, tell us about the vision for 2024, just so people have some understanding about what some of the growth strategy and goals are for 2020. Yeah, so there's a few big initiatives in 2024. Well, in the last, a real was essentially built in three years. In the last three years, we've gone from roughly 600 agents to 14,000 agents.

So one of the fastest growth. We're in all 50 states and the biggest Canadian provinces. We're in Canada as well. We're in Canada as well. So which is really, which is a great footprint in North America for us. Our goal is not to leave North America. Our goal is to dominate North America. We have, but one of the things that is my baby for 2024 is this.

There's roughly 1.6 million real estate agents in the United States. Out of the 1.6-ish million, 900,000 of them are with small independence. It's the Joe Chiron royalty down the street from us. 900,000 of them, right? there's roughly 83,000 independent brokerages. And they've built a brand for 3, 5, 10, 15 years serving local markets. And I was like, but with the recent things that are happening in the industry structurally and cost of doing business, it is really hard for them to scale.

So I've been talking to multiple independents and thinking, how can I get an independent to partner with Real? And the number one thing that they wanted was we want to keep our brand because we've spent all this time. building it's old. We established a private label program. Any independent in the United States based on state regulations can join real and they can keep their brokerage. So it's Charanjo Realty can keep Sharantio Realty powered by Real and actually continue to operate as that. That's number one. So we already done this in five markets and a big part for 2024 is to turn on the spigot to allow independents. Are you doing trade names or DBAs? Full DBAs registered under. So if you go to your DRE license now, I'll have 15, 20, 30 based on the state. Yeah. Yeah. So that's, but

The problem is not that. What we realized after we've done five markets of these is that these independents, when they come on, they need a way to run their own business model. Not one independent or wants the same business model. One is on an 80-20 split. One's on a 90-10 split. One is on an X-split with Y-cap, with Z-fees.

And it's super hard for them because what they do is they plug their model on top of ours, and then they have to make all these manual calculations on spreadsheets, etc., to make their agents pay out. So we built a software function, which is a brokerage in a box. so any independent can keep their brand and keep their economic model and flip to reel.

Now it dramatically reduces pain of transition, which is super powerful. And the third part of it is that independent brokerage, Joe Chiron brokerage on the corner of the street with 15 agents, literally has no value. Because no one's going to buy it. But now when they roll into real,

now they get to be a part of, they get stock, and so they get to be a smaller piece of a much bigger pie. So they get synthetic equity, which is super cool. So now we're able to take private label combining with what we call the pro teams, the team-based broker-in-a-box offering and the scale function, which is going to completely turn on a whole new world for real estate. I like the synthetic equity.

You give them, I know they get like. RCs and options, essentially. Yeah. Yeah. Which is, which actually is significantly growing now. Correct. Yeah, exactly right. So that's my personal, big initiative for, for 2024.

So stand on the mountain and educate people that. that 83,000 independents are out there who don't have a home to scale. You know, your model and our model is so similar because we have the same thing. We're trying to do the same thing with independent brokerages. And I tell them the same thing. I say, your mortgage company doesn't have value. It's not like there's a multiple here. Like you need to walk away from this thinking that you're going to have some big exit

because that's not going to happen. That's not the way this business, this mortgage company, company, they don't have big exits. Correct. You know. Not anymore. I mean, I think we hit, we were fortunate to hit what we hit and we hit our full earn out during COVID.

So we got very lucky. But it's not, it's not the exits. There's just no buyers. So that's the problem, at least in our world, there's, none of the big boys want to buy any small companies because they would much rather they roll in like we do. That's why we turn on the private label program. Yeah. Yeah.

And we're, we just have to, and both of us just have to continue to, to, to help these loan officers and realtors navigate, more importantly, like produce. Yeah. And what are you doing right now to get your loan officers to like take initiative, take action? So we are a training first company. A lot of times what brokerages will generally do is say, oh yeah, once a week I'm going to provide some two minutes of coaching or maybe play a video. I think our philosophy is completely different.

I told our teams that we have to take full responsibility for our agents to produce. Full responsibility. That means us delivering on skill. One of the things that we've done is we just built an amazing internal academy. And it's taken a year to get traction to have adoption. Yeah, like a thousand plus people on a call. Right? So if I do a training, I do a training one to two times a week.

I get, I break Zoom every time. Because I have to show up with the right playbooks, the right frameworks, the right skill sets. And I got to, they should be able to ask me a question, throw an objection. I got to be able to handle it. And this is with the top agents. So we've turned a training first company, which has been super, super powerful. The second is provided a home for the biggest team.

So I run something called a $100 million roundtable. Every team that does over $100 million in sales is like I get to work in their businesses with them. So I'm like, hey, you are a driving performance unit. Can I help you grow much faster? Those two initiatives have dramatically changed just skill in our, in our, at real, which is allowing agents significantly more confidence to do more business. So we have to lead with training first. You know, I'm really taking some notes here, mental notes, because like if you're really

crushing it, you know, in terms of like what you're doing to keep your top of agents engaged and to be in the weeds with them helping them grow. And I was actually going to be rolling out an initiative like that with a roundtable with all of our top agents now. It's just, you know, it's been like death by meetings for my agents, you know, and I feel for them because I'm rolling out so much and I got so many ideas and I'm throwing out so many things at them so fast. So it's hard to always keep coming up with a new initiative, get adoption, a new initiative, get adoption. It's like, and the adoption is poor for me.

And I'm sure it's the same in your space. It's actually interesting for us. It's not bad because what I tell the team internally is to do great things, you have to do fewer things. And anytime we add something, I'm like, stop, to do great things, we must do fewer things. To do great things, we must do fewer things. The team knows that. So yes, I may add a few things, but those are one to many, but for the $100 million roundtable, like that is six meetings a year with me, right?

And so now they know that, hey, put this on your calendar. We have six meetings a year. Sharon's going to come and deliver, which is good. How many of those you have? How many $100 million round tables? Just one round table. It's one round table essentially called the $100 million master. We have maybe 38 teams in that roundtable?

38 teams. Yeah. So it's somewhere between $100 and $1.2 billion. Wow. Yeah. Yeah, that's incredible. Yeah. So the last thing I wanted to leave with was your five minute.

Yeah. Your five minute call every morning at 5 a.m. Yeah. It's called the five minute mastermind? Five am. Club. The 5am Club. Shot on runs a.m. club every day at 5 a.m. He does a collective, is it a Zoom call?

It's a straight traditional. conference call and call yeah no pin you dial in a number and you hear me live that's that's awesome and it's you live fired up you already had your cup of coffee have five yeah no coffee i'm not a i'm a i'm a decaf kind of guy like i'm like this all the time so i no no coffee for me but i'll tell you this um this is my probably 10 years ago uh it's going on 10 years so roughly 10 years ago i had an idea and my doctor said to me i was i was not well and the doctor said to me he's like hey when you wake up early the weeks that you wake up early looks like your blood tests are better you should consider waking up early more. And I was a night owl. So I said, all right, well, I need some

accountability to wake up early. So what I did was I texted three friends and I said, hey, would you mind for a week jumping on a call with me at 5 a.m.? You don't have to say anything. I will either give you a joke or some inspiration or something cool as a message for two to three minutes and you can just drop off. So I created a little conference line number and then first day I was really hoping that they would show up and they all did. So as soon as I log into the call, I heard ding, ding, ding, three people showed up. I was like, awesome. I did a message and I quit.

The next day, I log into the call and it was ding, ding, ding, ding, ding, ding. And I'm like, wait, where are there two more people on this call? Anyway, that must be an error. I let it go. Looks like those people had invited a couple of other people. And then the next day I log into the call, it was ding, ding, ding, ding, ding, ding, ding, ding, ding, ding. I was like, why are they like 18 people on this call? Well, suddenly, people just started sharing the number and it went from three people to 10 people to 30 people to 300 people,

people to 3,000 people to 8,000 people. So we have like 8, 9,000 people right now, of which roughly we have maybe 3 to 4,000 live on a call every day. It is. And you're not marketing anything on there. You're just giving a message. What are your messages? Like, yeah. So it was the second one. Let's say to do great things, we have to do a fewer things. I was like, hey, a lot of people business plan right now. And they say, of all the things I did last year, I don't want to do anymore. I want to do this, this, this, this, this in New Year. Well, which one of these are you going to get done. In fact, with so much overwhelm, you're not going to get much done because to do great things, you must do fewer things.

So then I use that as a phrase and I build a message around that. But it's only three to five minutes. It's a straight conference call and it's a little espresso shot for your day. We actually have a Facebook group that Facebook group lights up every day at 505 a.m. Because everyone's discussing the call, then it dies down for 24 hours and then it lights up again. But it's 100% free, 5am club.net. 5am club. Cool.

Right on. It's been such a blessing to have you, man. And thank you for kicking off our first ever Coffees for Closers podcast. And guys, subscribe. You know, thank you guys for watching and listening today. Awesome guests we had, one of the most brilliant minds in the real estate space. And we look forward to having you again. God bless you, man.

Thank you.