← Coffeez with Joe Shalaby
Coffeez with Joe Shalaby
The Very First Episode ft. Sharran Srivatsaa | Coffeez for Closers with Joe Shalaby
00:36:24
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- [00:00]
Joe Shelby
We've had the privilege of sitting down with world Class Minds. 100 plus episodes, two full seasons, billions of dollars of wisdom and it all started right here. Our very first guest, Siran Srivatha. Entrepreneur, investor and president of the real brokerage where he helps scale to over 14,000 agents and over a billion dollars in revenue. He's sold companies, built others and still wakes up at 5am Daily to coach. From Wall street to real estate to angel investing, Sheeran's story is what happens when consistency meets vision. If you're serious about building something that lasts, this episode is required listening. It's where the coffees legacy began. Welcome back to the first ever Ko Fis episode with Shiran Srivatsa.
- [00:53]
Shiran Srivatsa
Let's go.
- [00:55]
Joe Shelby
Quick break. If you're a loan officer closing 50 to $100 million a year and still capped at 150 basis points, you're leaving ser money on the table. At Emortgage Capital, top producers are taking home up to 400 basis points. With better tech, faster closing and full control. No junk fees, no red tape, just real comp. Hit up joining Mortgage Capital.com and stop building someone else's empire.
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Shiran Srivatsa
I'm so stoked that you're here and you 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?
- [01:35]
Unknown
So the first one is the one that I'm most proud of. It was a technology company. We the greatest. 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, on Sand Hill 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 built as my senior paper to then actually build something that is live in the world today.
- [02:32]
Shiran Srivatsa
That's amazing. What is that company?
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Unknown
It was called Light Era and I was acquired by Sienna.
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Shiran Srivatsa
What did it do we built optical.
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Unknown
Switches, optical networking, big box. So we competed with the Cisco's and the red box of the world.
- [02:44]
Shiran Srivatsa
So you were a programmer by trade. That's like your niche.
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Unknown
Yeah.
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Shiran Srivatsa
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.
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Unknown
Yeah.
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Shiran Srivatsa
And, and understanding that, you know, being at the right place at the right time and, and just innovating at like lightning speed at the time. That's.
- [03:05]
Unknown
Well, I'll tell you that there's a, 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 1 full 0 less? And was that because there was a clause in my contract on a ratchet and it's, it's a dilution 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 wire hit and I would click summary statement, I'm 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, 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.
- [04:22]
Shiran Srivatsa
You know, sometimes like those big losses, but the relationships that you build through those losses are priceless.
- [04:28]
Unknown
Yeah, yeah, you could, I could never go back and recreate that. What, what happened there taught me more about business than anything else because a lot of people get early, 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 that what a delusion 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.
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Shiran Srivatsa
So do you invest now in your angel investor?
- [04:56]
Unknown
Yeah. So we have an angel investing arm. We have made like 24, 25 investments over the last 10 plus years. Most of these companies need follow on rounds. 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.
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Shiran Srivatsa
So have any exited, have you had any big exits out of any of those multiple?
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Unknown
Several have had private exits and. But one of the 25 went public, so which was a good win for all of us. That, that took care of portfolio theory. That took care of everyone.
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Shiran Srivatsa
So it's true. Is it true? Like when you have these kind of one company basically pays for all your 20?
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Unknown
It does, but it'd 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. 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 hotshot. 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 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.
- [06:40]
Shiran Srivatsa
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 2022, 2023, some of the tough times we had over with the rate spikes is like, I'm willing to go and be broke, go all in and be broke and do this with. And I don't care if I make money.
- [07:04]
Unknown
Yeah. Well, also, see, that's a really interesting thing, right? Real estate agents, mortgage brokers, why do they get in 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 extreme income potential, what you get for half the population is laziness. That's the problem, right? When you have unlimited uncapped 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?
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Shiran Srivatsa
No, it's a, it's a winning mentality. I don't care what it is, I just want to win.
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Unknown
Yeah.
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Shiran Srivatsa
And the drive that you have when you're an entrepreneur, you're like, to your point. And when you have extra time, laziness is like so immense between our two organizations, like everybody, you know, the, the average loan officer, the average realtor is just immensely lazy or they just know how to. Being leisurely would be a good way to describe it.
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Unknown
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 gonna push coaching so that you sign up for a thousand dollar 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, 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 pasted and sent it and sending me screenshots, man, I got like eight responses, nine responses, 14 responses. And I'm like, yeah, you gotta find a way to not put your pink font and actually like do the things that 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.
- [09:25]
Shiran Srivatsa
Shout on. You sound like me. Like, I literally, with my loan officers, I'd be like, here's exactly the data, here's exactly the message, here's exactly the cadence of messaging that to go out, copy this, implement this. It's bulletproof. Well, how did you mess this up? I don't understand.
- [09:43]
Unknown
I'll give you. Let's, let's do tactical stuff. I'll give you two really interesting examples, right? There's two emails that work emails or texts that work for our loan officer and for real estate agent. The number one email that can work for a real 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, 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 and a half percent, 6 and a half percent, whatever the number is, that's all you're asking. Because now the person that responds that activates and says, oh yeah, I am interested in that. Because now you have a conditional buyer, right? If I have real estate agents sending out the lo email, I have real estate agents that are saying, hey, Mr. Mrs. Klein, 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 the. They're buying a. 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.
- [11:01]
Shiran Srivatsa
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.
- [11:13]
Unknown
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, there were 33 MBAs that got in my year, that year was 2008, middle of the financial crisis, 33 MBAs that got 30 that got to Goldman. I had 39 one on one interviews to get the job at Goldman. 39 individual one on one interviews. Wow. 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.
- [12:05]
Shiran Srivatsa
That's still part of my body.
- [12:08]
Unknown
When I used to come home after Goldman, my wife be like, hey, you had, you had a long day. And there was the, there was the line on, on my hair with the headset, with the, with the band. But that's important because they wrap around.
- [12:18]
Shiran Srivatsa
Your head now so you don't get that line.
- [12:20]
Unknown
But I still have, 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, we were calling on CEOs and CFOs of big companies and two months into into training, managing partner walks in, he's, you know, he says, all right, whose birthday's birthday in January? Like six people stand up, he goes, come on up. One person comes up, they stand in front of the class, they hit a button. The cr, like Goldman CRM pops up. It has, you know, CEO of E Mortgage Capital, Joe Shelby right there, right? With phone number, et cetera. He's like, call, like, what the heck? So you're calling in front of the class. Like, think about the pressure associated with that.
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Shiran Srivatsa
Wow.
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Unknown
Right?
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Shiran Srivatsa
And Goldman is some serious boot camp.
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Unknown
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. 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.
- [13:51]
Shiran Srivatsa
Wow.
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Unknown
Yeah. And.
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Shiran Srivatsa
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 come in, comes in and. And trains him with like, NLP sales strategy. Yeah, they didn't have any of that at Goldman.
- [14:05]
Unknown
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, we 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. 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 a 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 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 memorized the entire contract.
- [15:28]
Shiran Srivatsa
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. Yeah, 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.
- [15:46]
Unknown
But. But from when you know, you can get a skill. I think a lot of. A lot of salespeople, both real estate agents and MLOs, think that, hey, I'm an outgoing person. I'm. I have a. I have a high D personality. I can sell. That's not it. When you have skill, then you can sell.
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Shiran Srivatsa
Yeah.
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Unknown
And that's the cool part. So skill is super important.
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Shiran Srivatsa
You know, there's. 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 other 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 is 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?
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Unknown
Yeah.
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Shiran Srivatsa
And, like, can you out think them? Are you. Can you outsmart them?
- [16:38]
Unknown
Yeah, there's, you know, there's a. The. 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 significantly. 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. So 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 very quick diagnosis and if you can be really honest with yourself, you'll figure out what the problem is.
- [17:36]
Shiran Srivatsa
You know, we, we try to present the opportunity, we try to mitigate the skill needed, try to mitigate the effort needed. But at the out, 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.
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Unknown
Yeah, of course.
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Shiran Srivatsa
I want to talk because I, I don't, I want to. And people want to know like, so you sold Telus real estate, you had that exit how first off, how did that happen? And then we all want to know about real.
- [18:08]
Unknown
Yeah, yeah, of course. So the coolest story, how this happened was I was a banker in New York and my partner, who is my, who's 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. Like, but if you're in it, I'm in it because I'm partners with you. So I was a passive investor in Telus when it started. And then one day I got quarterly statements and I was like, huh, this doesn't look, this looks strange. And so I found the P and L and I was like, this doesn't look right. And so I talked to the CPA and he's like, we found that the then CEO was embezzling.
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Shiran Srivatsa
Wow.
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Unknown
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 gonna laugh when I tell you the story. I had a simple model and my model was, alright, 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 and L? And the model just changed. So I was like, wait a minute. The vision, it was, 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. 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 the business to Douglas Elliman, which is publicly traded out of New York. And Elliman wanted a California based footprint. Now here's the key behind how we did that. As an 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 COO. 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 my sale. That was the business plan for next year. We did that for three years in a row.
- [20:45]
Shiran Srivatsa
I need to go over my business plan with you here.
- [20:48]
Unknown
The interesting part is 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 gonna do, I was gonna do. And then the offer from Douglas Doug Selman came which made it really easy. But Shopping the business every year made us have a much tighter business.
- [21:21]
Shiran Srivatsa
That's, 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.
- [21:37]
Unknown
No, totally. Right. But I think that's important because 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 an opportunity problem? Is this an effort problem or a skill? I can dice it out very quickly. My if it's an effort problem, like 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. You can, if you can find a way to diagnose this stuff quickly, then success is like just around the corner.
- [22:22]
Shiran Srivatsa
I mean like your, like your salesmanship, your, 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 Telus. You sold it. Douglas Elman, great. I'm sure 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? CEO?
- [22:48]
Unknown
The president of Real.
- [22:49]
Shiran Srivatsa
President of Real. And is there a CEO?
- [22:51]
Unknown
Yeah, there's a founder.
- [22:52]
Shiran Srivatsa
There's a founder, yeah.
- [22:53]
Unknown
Who's amazing. He and I have awesome partnership.
- [22:55]
Shiran Srivatsa
Awesome. So. And you're, I'm sure a pretty decent equity hold shareholder in Real. So how are you appointed as the, 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, for real.
- [23:11]
Unknown
So how it all happened was after we made our sale to Douglas Element, I had a 5 year non compete and so I sat on my hands for five years. I did two things during that time thing Number one was since I could not work in the real estate business in the US I helped real estate businesses in Australia and New Zealand.
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Shiran Srivatsa
That's cool.
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Unknown
And so I got a chance to do that for a few years.
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Shiran Srivatsa
You have non compete here, enforceable in California.
- [23:30]
Unknown
It was across our wherever the Telus footprint was. And I wanted to respect that. I mean, they paid me to sit on the sidelines, 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 US 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 real estate 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. And. But I don't do a lot of.
- [24:28]
Shiran Srivatsa
So your founder does all the ops, you do all the sales, all the visionary stuff.
- [24:32]
Unknown
He's amazing. He does all of the publicly traded Wall street functions, which is a lot, by the way, 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 conference. I'm like, oh my God, how do you do this stuff? And the reporting requirements, the working with the board, the audit committee, 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 COO function, our CMO function, all our brokerage, all our brokerage functions, they're all mine.
- [25:09]
Shiran Srivatsa
Wow. So what's. So we're, we're coming short on time. So I want to make sure that we, we go through your vision for 2024. Yeah, real and what do you think? You know, for people who are buying Reax right now, it's tough.
- [25:24]
Unknown
So a lot of this is material and non public information.
- [25:26]
Shiran Srivatsa
No, no, I'm just kidding. But really, tell us about the vision for 2024. Just so people have some understanding about what, what some of the growth strategy go and goals are for.
- [25:36]
Unknown
Yeah, so big. There's a few big initiatives in 2024. Well, in the last 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.
- [25:51]
Shiran Srivatsa
Which is in Canada as well.
- [25:53]
Unknown
We're in Canada as well. So which is, 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 independents. It's the Joe Sharon Realty 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 spent all this time building it. So 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 Sharon Joe Realty can keep Sharon Joe realty powered by real and actually continue to operate as a. 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 independence.
- [27:16]
Shiran Srivatsa
Are you doing trade names or DBAs? Full DBAs registered under. So if you go to your DRE.
- [27:21]
Unknown
License now, I'll have 15, 20, 30 based on the state.
- [27:24]
Shiran Srivatsa
Yeah, yeah, yeah. So that's.
- [27:26]
Unknown
But the problem is not that what we realize after we put five, 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 wants the same business model. One is on an 80, 20 split, one's on a 90, 10 split, one is on a 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 the 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 the reel. Now it dramatically reduces pain of transition, which is super powerful. And the third part of it is that independent brokerage, Joe Sharon 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 the, 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.
- [28:38]
Shiran Srivatsa
I like the synthetic equity you give them. I know you get.
- [28:41]
Unknown
They get like RCS and options essentially. Yeah, yeah, yeah.
- [28:44]
Shiran Srivatsa
Which is, which actually is significantly growing now. So.
- [28:47]
Unknown
Yeah, exactly. Right. So that's, that's my personal big initiative for, for 2024, is to stand on the mountain and educate people that 83,000 independents are out there who don't have a home to scale.
- [29:01]
Shiran Srivatsa
You know, your model and our model is so similar because we, 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.
- [29:15]
Unknown
Yeah.
- [29:15]
Shiran Srivatsa
Like you need to walk away from this thinking that you're gonna, you're gonna have some big exit because that's not gonna happen. That's not the way. This business, this a mortgage company, real estate company, they don't have big exits.
- [29:26]
Unknown
Correct. You know, more, I mean I, I think we hit, we were fortunate to hit what we hit and we hit our full earn out during COVID So we, 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.
- [29:48]
Shiran Srivatsa
Yeah, yeah. And we just have to. And both of us just have to continue to help these loan officers and realtors navigate. More importantly, like produce.
- [29:59]
Unknown
Yeah.
- [29:59]
Shiran Srivatsa
And what are you doing right now to get your loan officers to like. Yeah. Take initiative, take action.
- [30:05]
Unknown
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, 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 when I, if I do a training, I do a training two, 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 gotta, I. They should be able to ask me a question, throw an objection. I gotta 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 $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. In adriel, which is allowing agents significantly more confidence to do more business. So we have to lead with training first.
- [31:26]
Shiran Srivatsa
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 agents engaged and to be in there in the weeds with them, helping them grow. And I was actually going to be rolling out an initiative like that with a, with a round table 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 the adoption is poor for me. And I'm sure it's, you know, the same in your space.
- [32:07]
Unknown
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. The team knows that. So, yes, I may add a few things, but that, those are one to many. But for the, 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. Sean's going to come and deliver, which is good.
- [32:36]
Shiran Srivatsa
And many of those. You have six, how many hundred million dollar roundtables?
- [32:41]
Unknown
Just one roundtable. It's one roundtable. Essentially. It's called a hundred million master. We have maybe 38 teams in that roundtable.
- [32:46]
Shiran Srivatsa
38 teams?
- [32:47]
Unknown
Yeah. So it's somewhere between 101.2 billion.
- [32:52]
Shiran Srivatsa
Wow.
- [32:52]
Unknown
Yeah.
- [32:53]
Shiran Srivatsa
Yeah, that's. That's incredible. Yeah. So the last thing I want to. Wanted to leave with was your, your five minute.
- [33:03]
Unknown
Yeah.
- [33:03]
Shiran Srivatsa
Your five minute call every morning at 5:00am yeah, it's called the five minute mastermind.
- [33:08]
Unknown
5:00Am club.
- [33:09]
Shiran Srivatsa
The 5:00am club. Shot on. Runs a 5:00am club every, every day at 5:00am he does a collective. Is it a zoom call?
- [33:19]
Unknown
It's a straight, traditional conference call. Yeah. No pin. You dial in a number and you hear me live.
- [33:25]
Shiran Srivatsa
That's, that's awesome. And it's. You live fired up. You already had your cup of coffee at 5 and no coffee.
- [33:30]
Unknown
I'm not a, I'm a decaf kind of guy. Like, I'm like this all the time. So I. No, no, no coffee for me. But I, I will tell you this. This is probably 10 years ago. It's going on 10 years. So roughly 10 years ago, I had an idea and my doctor said to me 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 5am you don't have to say anything. I will either give you a joke or some inspiration or, 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 logged into the call, I heard, ding, ding, ding. Three people showed up. I was like, awesome. I did a message and I turned up and I, you know, and I quit. The next day I logged into the call and it was ding, ding, ding, ding, ding. And I'm like, wait, why 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 other people. And then the next day I logged into the call. It was ding, ding, ding, ding, ding, ding, ding, ding, ding. I was like, why are there like 18 people on this call? Well, suddenly people just started sharing the number. And it went from 3 people to 10 people to 30 people to 300 people, to 3,000 people to 8,000 people. So we have like 8,9000 people right now, of which roughly we have maybe 3 to 4,000 live on a call every day. It is.
- [35:00]
Shiran Srivatsa
And you're not marketing anything on there. You're just giving a message. What are your messages like?
- [35:04]
Unknown
Yeah.
- [35:04]
Shiran Srivatsa
So what was today's message?
- [35:05]
Unknown
What's the second one? Let's say to do great things, we have to do fewer things. So 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, this, and 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 5:05am because everyone's discussing the call. Then it dies down for 24 hours, and then it lights up again. But it's 100% free. 5amclub.net 5am Club Cool.
- [35:45]
Shiran Srivatsa
Right on. Shot 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 guest. We had one of the most brilliant minds in the real estate space. And we look forward to having you again. God bless you, my man. Thank you.