REALITY CHECK

Venture capital and tech disruption has been the name of the real estate game for years. But with a slowing market, the flow of big money may come to a stop. In that light, leaders at CEO Connect pondered ways for real estate tech firms to thrive in a more challenging environment.

TECH REALITY CHECK

Brad Greiwe,
Co-founder and Managing Partner, Fifth Wall

I think you’ll see a much more disciplined venture ecosystem moving forward, maybe premised on software-only companies versus companies that are more real estate firms disguising themselves as a technology company. Some of the best deals I’ve seen right now are at the intersection of real estate and technology, for sure. But expecting those companies to grow 10X every year is just not going to happen.

TECH REALITY CHECK

Clelia Peters
Managing Partner, Era Ventures

One of the upsides of what’s happening in the industry right now is lots of consolidation. I do think we’re going to move toward more end-to-end solutions, which will be better for agents.

TECH REALITY CHECK

Dmitry Popov
Co-founder, Tomi.ai

Strategize partnerships with your key customers. Ask them to pay a bit up front to share the upside. And focus on generating revenue early.

TECH REALITY CHECK

Carlos Matias
CEO, PropTech Solutions

Focus on simple revenue generating products to get to profitability as soon as possible.

TECH REALITY CHECK

Sean Black
CEO, Knock

Do more of less. Do what you are uniquely good at. Outsource what others are good at. Now is an opportunity because all the competition is gone.

TECH REALITY CHECK

Byron McDuffee
President and CEO, Elm Street Technology

There are several options to raise capital if venture capital is not available. One, raise capital with early mover customers. Two, obtain a convertible note from early investors. Three, raise equity or convertible notes from friends and family. Four, kickstarter.

TECH REALITY CHECK

Chris Heller
Chief Real Estate Officer,
OJO Labs

Lead with revenue. This could be done with slower growth, going deeper verses wide, and doing fewer things. Find strategic partners and investors.

COMMISSION COLLISION

One of the biggest challenges to real estate's status quo is unfolding now in the courtroom. That's thanks to a pair of commission lawsuits that could upend how brokers get paid. At CEO Connect leaders weighed in on the suits, and how they might change the business.

COMMISSION COLLISION

Brian Boero
CEO, 1000watt

We could get thrown a nasty curve ball. If you’re really good, you can hit it. If you're not prepared or you're not good, you’re gonna miss it. I prefer to position this as a happy reckoning. There’s going to be an opportunity for those who are nimble and good and who start thinking about this and planning for it in advance. Those who aren't prepared and don't have a plan are going to lose. I view that as a positive and healthy thing.

COMMISSION COLLISION

Marinda Neumann
CEO, Neumann & Associates

Expect more transparency around the commission structure in the industry. And the possibility of a mandate for the use of buyers' broker agreements.

COMMISSION COLLISION

Marnie Blanco
VP of Industry, Pacaso

Buyers agents will need to look for new models. Commissions for buyers' agents will stall as buyers stop using agents. But in doing so, duel agency will increase and may not serve buyers in the right way. And so buyers will be willing to pay buyers' commission to be represented appropriately.

COMMISSION COLLISION

James Dwiggins
Co-founder and CEO, NextHome

Agents will have to plan to ask buyers directly to pay commissions and articulate their value clearly. We want to be optimistic, but we can't just put our heads in the sand. We as an industry have to start preparing our agents to get used to asking for the buyer broker agreements on every transaction. We have to start figuring out how to articulate our value differently so that a buyer understands what we actually do as a profession.

THE MARKET RECKONING

A year ago, the housing market was ascendent. Then 2022 happened. We asked industry leaders how to survive the downturn, and how some companies managed to thrive in previous bear markets.

The market reckoning

Errol Samuelson
Chief Industry Development Officer, Zillow

The companies that are some of the biggest leaders today are the ones that kept investing.

The market reckoning

Lara Burns
CEO, Global MCS

The ability to pivot is crucial.

The market reckoning

Debra Beagle
Co-owner and CEO, The Ashton Real Estate Group

Play defense and offense at the same time. Focus on the highest level of service, and on the education of agents and consumers.

The market reckoning

Colette Stevenson
CEO, REsides

Don’t lose perspective. Don’t cut marketing. Empathize with your customer and their customer — and make wise choices dependent on what they need now.

The market reckoning

Brad Inman
Founder of Inman

Focus, focus, focus. Dump loser products and focus on core revenue.

The market reckoning

Rudi Botha
CEO, BetterHome Group

Continue investing through the cycle. Build trust with customers.

The market reckoning

Patrick Stone
Chairman and founder,
Williston Financial Group

Have a plan for every possible scenario. Understand that the market is different everywhere in the country. Try to align with the market where you are. Try to develop metrics you can use.

The market reckoning

Andrew Flachner
Co-founder and President, RealScout

Companies that fixate on ROI when making investments are able to build value at a time when competitors are making cuts and pulling back. ROI-focused companies will pull ahead and clean up when the market recovers.

The market reckoning

Ken Baris
CEO Berkshire Hathaway HomeServices Jordan Baris Realty

Keep a hyperfocus on not just more sales associates, but on helping your associates sell more through envisioning, empowering and energizing.

The market reckoning

Adam Oberski
Owner-broker, C21 Curran & Oberki

No matter how close you are to your people, get closer.

The market reckoning

Jerry Holden
Founder and CEO, THA Brands

For agents, a plan plus consistency equals execution. For broker-owners, your goals plus value proposition equals execution.

LEARNING LEADERSHIP

One of the hardest things leaders have to do in a downturn is rally the team. So we asked industry leaders for tips on how to keep morale up when the market slows down.

LEARNING LEADERSHIP

Clelia Peters
Managing Partner, Era Ventures

The industry has to challenge itself to embrace new ideas, to be thinking about what’s next, or someone’s going to come in and probably introduce something that may be more disruptive and potentially more unpleasant.

LEARNING LEADERSHIP

Alex Montalenti
CEO, Real Grader

It’s all about mindset. Self-control is necessary in hard times. Discipline and focus is needed. It's a perfect challenge that will build new practices and new strengths to overcome anything.

LEARNING LEADERSHIP

Tim Heyl
CEO, Homeward

Face reality and know that your best employees are strong and smart enough to do it too. Share the burden. Nobody succeeds alone, and you’ll need them to push through. Winners want to know the gory details so they can play the game well.

LEARNING LEADERSHIP

Michael Perna
Broker and team owner, eXp

In good times, leading from the stage and talking at your people is easy. In boom times, money does the heavy lifting. In hard times, we have to get off our perceived pedestals and get side-by-side with our people. Their problems become our problems. We lead with empathy, not sympathy.

LEARNING LEADERSHIP

Hoby Hanna
President, Howard Hanna Real Estate

If you think you’re close to your agents, get closer to them. Because they want you to survive. They want you to grow. They’ll go along with cost-cutting and leanness and understand you’re running a business. But we have to explain it to the people that we work for and work with every day.

LEARNING LEADERSHIP

Sue Yannaccone
President & CEO, Anywhere Brands

I think when you’re making these decisions you have to do it with extreme empathy for your people. Reaching out to individuals who may be displaced from your organization who are good talent and [asking] ‘How can I help? How can I support?’ And then making sure very quickly, you’re wrapping your arms around individuals who are still with the organization and saying, ‘Here’s our plan. Here’s our path forward. Here’s how we grow out of this. We’re in this together.'”

LEARNING LEADERSHIP

Veronica Figueora
Team Leader and Success Coach, eXp Realty

It's about people, it’s about showing up and really caring about your people, understanding how they’re feeling, boosting morale. Be honest during these times.

LEARNING LEADERSHIP

Anthony Lamacchia
Owner, Lamacchia Realty

The good news is people are looking for leadership. [The] number one rule of thumb is to just step up and do it and don’t overthink it.

LEARNING LEADERSHIP

Brian Donnellan
President and CEO, Bright MLS

If you're going to be prepared for this, you've got to know what the data says. You've got to fundamentally look at what it is you're doing and make decisions based on real information and not what you think is going to happen, because I don't think you can do that and be successful.

LEARNING LEADERSHIP

Sherry Chris,
CEO, Anywhere Expansion Brands

Keeping your agents as close as possible and increasing tech adoption is key. We’re all in this together, and we all wake up terrified some mornings.

LEARNING LEADERSHIP

Chris Stuart
President, PLACE

We really focus on skills activities and accountability. So that shows up in our training and our meetings and our certifications.

LEARNING LEADERSHIP

Sarita Dua
CEO and owner-operator, TheAskSarita Team

During tough times, employee engagement is key. We must celebrate success, tell positive stories and as leaders do what we can to minimize and eliminate stress. It’s a we-us feel, not a you-them position. We’re in it together.

BATTENING DOWN

With inventory down, layoffs widespread and rates high, trimming fat will be an inevitable part of 2023 for many companies. So, we asked industry leaders what types of things they might cut first, and how to think about their roles as leaders in a newly slower market.

BROKERAGES BATTENING DOWN

Bernice Ross
CEO and President,
BrokerageUp and RealEstateCoach.com

Use the 80-20 rule. Eighty percent of your revenue comes from the top 20 percent of your activities. Across the board, drop the bottom 20 percent of your least productive costs, agents, clients, etc. that only give you a return on investment of about 1 percent.

BROKERAGES BATTENING DOWN

Mark McLaughlin
President, McLaughlin Ventures

Consider closing your headquarters. Listen and learn. Get the HQ team together monthly to drive teamwork and culture.

BROKERAGES BATTENING DOWN

Thad Wong
Co-founder and Co-CEO, @properties

We did cut some fat, and I thought it was pretty easy. Just knowing where we need to invest [is key]. Everyone [cutting the fat] right now, we’re going to raise our heads in 12 months and we’ll be thankful.

BROKERAGES BATTENING DOWN

Sue Yannaccone
President & CEO, Anywhere Brands

Markets are going to react differently. Understanding truly what’s happening in your market and helping your agents and your consumers know is so critical. Because the headlines tell a very different story than what each individual office within the region might be feeling

BROKERAGES BATTENING DOWN

Tamir Poleg
CEO, REAL

Culture is kind of a secret sauce; there’s no one right way to build culture. I think the model itself needs to create a line between the agents and the brokerage. They should feel like equal partners, or at least like partners.

BROKERAGES BATTENING DOWN

Maureen Kiely
CEO and Founder, RealCheeky

Empower agents with tech tools that allow them to focus on sales and marketing. Streamline your process. There are amazing tools but they all need to be brought together.

BROKERAGES BATTENING DOWN

Karen Yolevski
Chief Operating Officer, Corporate Brokerages, Royal LePage

This market provides the opportunity to take stock of your people and processes, and ring-fence your key contributors to keep driving growth in the face of headwinds. It is incredible what a smaller group of driven individuals can accomplish with a clear path and common goals.

BROKERAGES BATTENING DOWN

Spencer Rascoff
Co-founder and Chairman, Pacaso

The advice I’m giving to my companies is just cut to survive. Get to the other side, spend every penny like it's your last, assume you won’t be able to raise more money because you might not. And hope that you’re still in business on the other side of this downturn.

BROKERAGES BATTENING DOWN

Glenn SanfordFounder and CEO, eXp World Holdings

There’s a lot of people hurting. Personally, I volunteered to cut my comp in half. It helps us keep more people employed.

BROKERAGES BATTENING DOWN

Rick Hennessey
CEO, HouseAmp

We reduce hiring and slow roll new features. [We're] less aggressive on marketing and focus on direct sales.