Long the frontman for the company’s technology development, Josh Team stepped into a new role this year as president of Keller Williams, answering directly to CEO Gary Keller.
Team’s ascension comes at a time when tech is at the forefront of the 36-year-old residential real estate giant’s value proposition.
The Austin-headquartered Keller Williams recently unveiled Command, its AI-powered customer relationship management platform that’s the linchpin of the company’s tech ecosystem. A consumer-facing platform and website design is on the way.
Team will speak on stage at Inman Connect in Las Vegas at the Aria Resort on Thursday, July 25, discussing Keller Williams’ quest to build the best tech platform for agents and their clients.
I only speak to our franchise model, because ours is obviously different. Every key performance indicator that we watch to evaluate the health of our ecosystem, from production, agent count, production creation, attrition, the financials, every single key indicator is rising. We have a very healthy organization.
We’re continuing to grow, we’re continuing to set records. In fact, we couldn’t find one indicator that’s going backward.
(Editor’s note: In Keller Williams’ May 2019 quarterly earnings report, the company reported 157,377 agents in the U.S. and Canada, down from 159,447 agents at the end of the fourth quarter 2018, and 170,130 agents at the end of the third quarter of 2018, following a purge of nearly 13,000 “ghost” or inactive agents from the rosters of its market centers.
Asked about this fact after the initial interview, Team responded in an email to Inman: “Sorry, we accounted for the ‘ghost agents’ when looking at our numbers internally. So, although the total number of agents dropped; when you remove the ones that got removed when we purged those, then you see a clear trend line that we are still growing at the same accelerated rate, and actually achieving some of the biggest numbers we’ve ever seen with agents choosing to affiliate with KW. Even more exciting, is that the agent production is up as materially as well. Sorry for any confusion, I hope this helps.”)
I definitely think there’s a lot of money coming into the real estate space, but I have not seen that turn into any metrics that are negatively impacting us.
You started a new role this year, moving into managing more than the company’s tech. What have been the biggest challenges you’ve faced in that new role?
I think any time you take on a new opportunity, you have to grow. And growth is always a fun and exciting and challenging journey. I think the biggest difficulty is personally growing. That’s a journey that I’ve personally been on since I was a teenager, and I’ll probably continue doing it. I think that being able to serve in the role under Gary [Keller], and help lead the largest real estate organization under one brand that the world’s ever seen is exciting. That has its own challenges and its own opportunities.
KW unveiled its CRM Command earlier this year. What are the early results like in terms of adoption, and what are you hearing from your agents?
The way that we look at it is, if it’s easy and valuable, people use it. And if it’s not, they won’t. There’s no policy. You don’t have to use any of our system or platform right now. This is all an opt-in. This is how we’re holding ourselves accountable to adding value.
It’s interesting, because over the last three years ever since I started talking about this, the number one thing – is it fair to say, critics or skeptics – have told me was our ability to build technology was suspect at best and that adoption would be our biggest headwind. We just haven’t experienced that. I don’t know if that’s the culture that Gary Keller and Mary Tennant and Mo Anderson and some of our past leaders have built. I don’t know if that it’s just that people get the vision. I don’t know if the technology is just cool.
But here are some of the hard facts, numbers that we look at. At the end of the first quarter, we were at 41,000 active users. In the past couple months, that’s grown by 45 percent.
We’re now right at about 60,000 active users. We’ve got over 23 million active contacts into the system. Roughly, we’re averaging about 200,000 contacts added a day. Over 113,000 deals have been put in and tracked from first time they have a conversation with a potential client all the way through closing. 16,000 of those have actually gone through the entire experience. Those can be fully customized by the agents so that every agent, every consumer journey, can be fully customized.
We’re seeing it grow at about a 25 percent month-over-month basis. Some of our more mature products that are in the platform, like referrals, these are still growing. Referrals just grew 6 percent in the last month. Every indicator from active daily users to people putting their database. And we’ve tried to think about it as over 30 million interactions.
We just rolled out some new features last night, and there’s already been over 100,000 tasks put into our new task management system to help agents make sense of their days. You take all the chaos and all the things you have to do across all different parts of servicing clients or finding new clients or working with a brokerage or doing the administrative stuff and it manages all that for them, makes sense of it.
We have more people using Command on a daily basis now than most of the brokerages that consider themselves our competitors have in their entire ecosystem.
Does operating on the franchise model make that more difficult or add a layer of difficulty because you’re trying to sell individual businesses on your tech when they likely already have a CRM and already have a solution in place?
We haven’t experienced that. Yet again, just in the past couple months, we’re up 45 percent, we’re up to 60,000 daily active users. With these growth rates we believe we’ll be somewhere in the 90,000 to 100,000 daily active users in the near future. It may be hard to get that last 20,000 or that last 15,000.
There’s probably a cohort in our ecosystem of 170,000 and growing agents that are less interested.
But the premise is pretty simple, right? If I can provide the best tech, copy all the stuff out there that people want without charging any additional money, that sounds pretty easy, right? Hey, do you like your car? Yeah. What are the three features you wish your car had? Awesome. Now, would you like that car for free?
What’s the latest on the roll out of the consumer app? And we’ve talked about this before, but do you really think Keller Williams has the ability to catch Zillow, Redfin and realtor.com, to be the place that consumers go for listings?
There will be consumers who prefer our consumer experience over any other search portal or website or app. And I know this because we tested this with tens of thousands of consumers. I can share the data with you that verifies that.
Does that mean that we’re going to get more eyeballs on our app? I don’t know. And honestly, what I care less about is how many consumers are going to KW.com. What I’m actually trying to make sure of is, that for John in Iowa, who has a 3,000-person database, that those 3,000 people use his app to create the best experience, so that he can be their agent for life. And we think we have that.
So I don’t care necessarily about the aggregate number, I care about making sure we have the platform, the operating system and the consumer experience that for Sue in New York or John in Iowa or Ben in Seattle, or whoever that may be, they can use our system and it doesn’t cost any additional money and their consumers are getting a better experience.
When you take the best parts of Redfin and Zillow and you couple that with an agent, you connect all that in one platform, well, then that lends itself to a better buying experience, a better selling experience and a better experience for people just curious about real estate.
We’re still on schedule, which was this month, to wrap up the first part of the search experience. That’s on track. We started consumer labbing that. One of the cool partnerships that I can tell you about is, Google has joined.
And Google employees are the ones who are beta testing our consumer app, making sure it matches and achieves the standard technology that they want. And we ask them a simple question: do you like this more than you like these other search sites? And if their answer is no, then we work with Google employees, who are also buyers of real estate, to say what would you do to make it better? And then we’re on that journey together. We’re pretty excited about what the early testing is revealing.
Yeah, there’s definitely a cohort of the market that is distressed buyers, divorced, death in the family, you’ve got to move tomorrow.
There’s also a cohort in the market that has a lot of found equity in one of the best real estate recoveries the country’s ever seen.
Absent that, we haven’t seen much movement, to be candid with you. We don’t think this a huge addressable market for all real estate. We think there’s a stock value war happening and that’s what you’re seeing with some of these larger companies who are spending a lot of money and getting a lot of headlines. I think they’re trying to send stock prices up.
I mean the data is pretty clear on this. That being said, we’ll continue labbing this with our agents and helping our agents get more market share with our iBuyer program. We’ll be ready to share some of that data probably when that lab matures. That being said, we don’t see that growing anywhere near the double-digit percentage. We see that being a relatively small cohort marketplace.
In your latest financial results, you talked a lot about being willing to acquire technology where needed. What’s the impetus behind acquiring versus building? Are these acquisitions Keller Williams has closed on or are still in talks with? Are they partnerships? Can you give me a little bit of insight into that?
When I first joined Keller Williams it was very clear to me that there was an arms race to create the best consumer experience. We just fundamentally believe that an agent is the best delivery mechanism of creating the best consumer experience. The reason we believe that is not only because it’s in our best interest, but because the data bears that out.
In this moment in time when it’s the easiest it’s ever been to sell and buy real estate on your own, and the healthiest real estate economy that we’ve ever had, you’d imagine you’d see less agents involved in transactions. But you’re seeing the exact opposite. You’re actually seeing more agents involved in transactions, especially with younger buyers.
So then the question is, okay, well then, how do we create and empower the Keller Williams agent to deliver an even better consumer experience? And we believe that’s going to be based on the data. Who can create the most informative, curated, customized experience for their consumer, based in data, coupled with that Realtor’s local expertise?
That’s why we did the NextDoor exclusive deal several years ago. That’s why we went to the partnership with Google and we got a data alliance there. That’s why we made a strategic investment into Porch.
That’s why we’ve purchased companies that’s focused on data and AI around inspection. That’s why we’re doing these things. We’re going out and building data alliances and integration partnerships with companies that are not direct competitors, but they have massive troves of data around real estate, so we can empower our brokerages and our agents to provide the best experience off that data.
We always have a buy-build-partner framework we look at. What does it cost to build this? How much faster is it if we buy this and what is that cost delta? And then how much faster, or what do we get if we partner? Once we identify what the experience is that we want to go achieve, we simply add a buy-build-partner framework to it.
And then that’s how we do things like buy SmarterAgent. Or we’re going to copy the design studio that some of the other brokerages have that we just released last night. We do this analysis basically 24/7.
Since you are a private company, I do have to ask, Is there a multiple of EBIDTA that Keller Williams is looking to pay? Is there a general range you can give us?
No, and that’s not because I’m being shady. It’s because the strategic acquisition formula will change. So I don’t really care about your revenue. Because when I acquire you, I can’t sell your product because my whole thesis is, ‘I’m gonna give your tech away for free.’ So I can only evaluate you from how much is it going to cost me to build you, to steal or copy what you have. And then I take that number and apply a multiple for getting there faster with no headache. And that’s the kind of strategic premium for that. That’s how I value these acquisitions.
You’re working directly with Gary Keller now, who’s a bit of an iconic figure in the industry. Is it tough to debate or disagree with somebody with such a reputation?
The answer is no, and that’s a credit to Gary. When you’re in the room, and we have an eight-hour conversation every Monday about our initiatives, our priorities, what we’re doing down to the button, he’s very curious and engaged. And in those meetings, he’s not iconic Gary Keller, he’s sitting down actually.
He’s just a guy and he’s just partner in that room. It’s neat for me sometimes to get to go to these events and watch him because I get to see the iconic Gary, but I think part of his brilliance, and why so many people follow him, including myself, and so many people have affiliated their life with the Keller Williams brand, is because of that about him. So no, that hasn’t been challenging. It’s pretty neat.
Does his public persona and often strong rhetoric ever make your job more difficult? Is he ever overpromising something and putting you in a bind?
No, never. Gary and I are talking to top agents and agents across the organization every day. And so we’re very transparent.
Typically, the way it works is I’m usually telling him the timelines I think we can hit and he’s sharing that with the world. If anything, I’m putting him in a bind. That’s just the journey we’re on.
We actually had a conversation recently that was interesting. Three years ago, we were convinced this is the obvious path that all the other big franchises we’re going to be getting in and all the big brokerages getting on and we’d be in an arms race.
The craziest thing is, there’s been a couple small moves around, we’ll buy this component, or have this dashboard that leads to other systems, or we’ll have this one marketing tool.
No one’s actually trying to connect all the Legos to build the best experience for consumers and agents. So now we look up and we’re, like, okay, well, I guess we’ve got time to really get creative here. That’s really interesting to us. We assumed there’d be more market pressure from competitors, and we just realized that they’re a little farther behind than we had originally anticipated.
The final question I have for you is what do you think is currently the biggest threat to Keller Williams agents? Is it the Moehrl lawsuit? Is it different tech offerings from major companies like Zillow? What do you identify as the biggest threat to your agents?
We actually do an assessment every month in part of our monthly meetings around the state of the industry and what do we think those are? Again, just being really transparent with you, you’ll probably roll your eyes. Right now our biggest threat is ourselves. We have such an ambitious and aggressive timetable.
We launched Keller Mortgage and provided free loans. We’re getting into iBuying. We’re launching an agent platform. We’re launching our consumer experiences. We’re announcing multiple partnerships. We’re getting into [mergers and acquisitions]. We’re accelerating our velocity and doing so much that we’ve just got to nail those fronts.
If we nail those fronts, I don’t believe anyone will be able to change our trajectory or our goals.
Can I just quickly follow up and ask, what are some of the other threats that you’re identifying in those monthly meetings and are things that concern you?
I’m on the record, I think Redfin has really cool technology. They’ve been at this for a decade. They’ve got a billion dollars plus and growing and they’ve got a 0.8% market share and growing at a rate of 0.1 percent. So, interesting — not scary.
You got other really loud brokerages that are announcing their amazing, really cool things, but we’re getting our best numbers still in how many agents are deciding to affiliate with us and how long they’re staying with us. Our agent production is skyrocketing right now. We’re still dwarfing anyone else that’s making headlines there, so that doesn’t scare us.
We’re looking at what some of the portals are doing and they’re going all in on iBuyer — but we see that being a single-digit market share opportunity at best, with our own data. So we’re like, ‘Great, that’s awesome.’ We’ll continue watching that.
When you look around at some of the other traditional franchises that we compare ourselves against, they’re really quiet on doing anything really big and instrumental. They’re kind of running that same play that they’ve been running for a while now.
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