Where Real Estate Gets Its Dirt

I’ve got some big news to share.

R+W

Dan and I are very excited about this new chapter. We notified the team at W+R Studios yesterday morning at an all-hands meeting.

I thought the meeting was important enough to be extra prepared so I wrote a kind of script to make sure we covered everything. Dan helped me edit it. I think it does a good job of explaining our thought process on our decision so, with Dan’s permission, I decided to share it with all of you.

TL;DR: W+R Studios has been acquired by Lone Wolf Technologies and have shared some of the proceeds of that sale (1 million dollars) with all W+R Studios employees and we are staying on with the team.


DAN

(SLIDE)

Hi everyone. Thanks for joining us today. We have a few important announcements.

First off I want to congratulate everyone.  We have faced many challenges this year and you guys have performed better than Greg and I could have ever wished for.  We successfully transitioned into a 100% remote workforce without skipping a beat, we lept in front of our competition with the launch of Cloud CMA Live and gave real estate agents a new way of doing business during a crucial time.  

We also successfully executed our first annual “best practices” survey, renewed our largest MLS customer, added a brand new MLS customer, with over 20,000 agents, and we are within striking distance of hitting our goal of 10,000 new direct sign ups for the year.

We did all of this without having to lay anyone off, and having a profitable year, all during a worldwide pandemic.

You guys are amazing, and should be very proud of yourselves.


GREG
(SLIDE)

2020 has also been an interesting year for the real estate industry as a whole. It has been said that the world wide pandemic has not really started any new trends but only accelerated existing ones.  

(SLIDE)

That is certainly true for real estate.  Ramping up to 2020 many new startups have been pouring money into real estate. Many of these new “proptech” companies seek to disrupt the industry by replacing agents and/or changing the way real estate is practiced.  Zillow has completely changed their business model and is becoming a broker.  These trends will only increase as more and more money is being bet on real estate, which venture capitalists and Wall Street look at one of the few economic bright spots during this pandemic. 

Adding to that we are seeing a massive amount of consolidation in the industry.  Many companies are merging with other companies, hoping one plus one equals three, or looking to pivot. A deal that personified this was announced recently. Homesnap was acquired by CoStar for $250 million dollars.  CoStar is a company that basically runs a private MLS in the commercial real estate industry.  They have been looking at residential real estate for quite some time.  This has only accelerated by the fact that the commercial real estate market (their main business) is facing pressure due to the “work from home” trend. Somewhat recently they bought Apartments.com and poured a ton of marketing dollars into it, you may have seen the television ads with Jeff Goldblum, making it the top site for rental properties in the country.  Guess who used to be the top site for rentals?  Zillow.  From my viewpoint CoStar represents the first real challenger to Zillow.  CoStar is worth $35B dollars, while Zillow is worth around $25B. But, many are worried about CoStar’s intentions and what it means for the MLS and real estate industry.


DAN
(SLIDE)

Organized real estate is also changing.  Recently the National Association of REALTORS was sued by the Department of Justice.  The lawsuit was centered around transparency of real estate commissions.  NAR quickly settled and made several concessions and we still don’t know the full consequences, plus other lawsuits are looming.

GREG
(SLIDE)

In a nutshell things are getting weird. And with so many companies with tons of cash, things are also getting pretty scary too for a small company like us.


As many of you know Dan and I started this company with our own money.  We opened a bank account in 2008 with just $2,500.  That’s very different from most companies in our space.  Some start with millions of dollars in the bank from venture capitalists before they sell their first product.  The fact we grew that tiny $2,500 dollars to a 9 million dollar a year business is truly remarkable and a testament to all of you.

I think we have also previously shared with you that over the years we have received many inquiries from companies about whether W+R Studios would consider being acquired.   We received so many of these inquiries we hired an investment banking firm to handle them.  We have typically responded, “W+R Studios is not for sale”. Recently those inquiries have reached a fever pitch, and for good reason.  

W+R Studios is a very attractive company.  

 (SLIDE)

We have been growing over the years, and we are profitable.  Our Cloud CMA and Cloud Agent Suite brand, our reputation, the quality and design of our products and our people are a huge draw to companies wishing to acquire to grow faster.  Not many companies in our space have accomplished what we have created here together.

DAN
(SLIDE)

About 2 months ago we received an inquiry from a company that caused us to pause and rethink our position of staying independent.  It was a company we respected and thought were doing some smart things.  After further talking with them, we grew more interested because we saw that our combined companies fit well together. 

1. They are focused on helping brokers and agents succeed, not replacing them.  

2. Their company mission is to “simplify real estate”, similar to ours.  

3. They had similar partnerships with MLS organizations and associations.

4. Their strengths fit a lot of our weaknesses and vice versa.  

We don’t know what is going to happen in the next few years.  
As we said, things are getting weird and scary. We still see a lot of opportunities, but it’s difficult for a small company like us to take advantage.

So, Greg and I have made the decision to join forces with this bigger company.


(SLIDE)

The name of this company is Lone Wolf Technologies.

You are going to receive more information about them in an email and we are going to hold a Town Hall with them later today where we are going to introduce you to their …. our….new CEO, Jimmy Kelly.  

But first we want to make a few things perfectly clear.

GREG
(SLIDE)

Number one.  Dan and I are not going anywhere.  We love real estate.  This is our life’s work.

One of the reasons we chose Lone Wolf is because we…they… wanted us to help them navigate the industry and continue to work here with all of you and set our sights on even bigger goals.  We are not done yet, and we have a lot more to contribute to the industry and tons of ambition left.

Number two.  Nobody is going to lose their jobs. Obviously things will change.  Right now they have their own culture and traditions and we have ours.  In time we will create a new company culture and have new traditions…together.

As we said, you will have a chance to hear directly from Jimmy later today and ask questions.


DAN
(SLIDE)

Now I know this is a big shock to you guys.  Change is always scary.  But we want you to know that we didn’t make this decision lightly and in doing so we thought of all of you.  It was a tough decision, we would love to stay independent.  But, being part of a larger company will give us resources to help us compete better, it will allow many of you to grow, make more money, and further enhance your careers.  Later, many of you will meet the rest of the Lone Wolf team.  They are good people, ambitious and smart, just like you.

Remember, your knowledge, experience and talent is why Lone Wolf was attracted to us in the first place.

Okay.  So that’s the first bit of big news we wanted to talk to you about today.  Here’s the next.

GREG
(SLIDE)

I think you will all agree we have something really special here at W+R.  Our company culture is more like family.  Dan and I really felt that you guys deserved to take part in our mutual success.  So we are happy to announce that we have decided to take the first one million dollars of the proceeds of the sale of W+R Studios and share it with all of you.

We are distributing the money based on your position, and how long you have been with the company.  I’m pretty sure that for most of you this will be the biggest check you have ever received in your lifetime.  Please accept it with our gratitude.

(SLIDE)

This is not the end.  The journey still continues.  We are proud of each and every one of you.  From the bottom of our hearts, thank you.  And remember we still have a lot of work to do, and we are going to need your help to get us there.

Right now I want to bring in Karl and Damien to say a few words and then hopefully we can answer your questions.

DAN

Hold on, hold on, Greg.  I’m sure there is one question a lot of people have, but are afraid to ask….

And that’s “When do we get our money?”

(SLIDE)

I’m happy to say, your money will be deposited into your bank accounts tomorrow morning.

Right Karl?


(Karl and Damien speak then Q&A)

  1. Wow. Congratulations. You have both been class-acts in this industry and your generosity with your team is not surprising at all to me. I wish you the best of luck moving forward.

  2. Congrats Fellas! Well deserved and your generosity is a testament to the type individuals that you are. Cheers to 2021 and look forward to hearing about the next chapter. Bennett

  3. Congrats to all of you!!!!
    Always respected and admired your company. Now you guys have show to the world how to say thank you to the people that help you get there
    Greg I heard you are buying drinks for everyone next time we can get together

  4. Congrats gents…… Well deserved and super cool that you are sharing the some of the proceeds with the team. That was a very honorable thing to do for your team. Many owners would not have done that. Class act…

  5. I remember seeing a demo of Cloud CMA at the W in San Fransisco while it was still in development. What you were doing, just like you’d always done, was groundbreaking. You boys made a success of your product but I think it’s worth remembering how hard you worked, how you sacrificed, how you jumped out of corporate America and took a chance on something you believed in. I feel very fortunate to know and love you and Dan for many years. I continue to learn from both of you. Congratulations on another success. And thank you for always making time to take my calls. Also…I secretly have a crush on Dan Woolley 😉

  6. Congratulations to Greg and Dan and to your team.
    I remember encountering the two of you at your Lightning booth at a NAR conference many moons ago and remarking how much fuss that just the two of you were making across the industry.
    I’m happy that you took it as a compliment and ran with it to become the proptech moguls that you have become.
    Keep on being great at what you do and what you bring to the industry.

    All my best,

    JM

  7. Congratulations, Greg, and to everyone at W+R Studios. And here I thought your book was the biggest news of the year! Kudos on your long commitment to advancing the industry and its people, and for sharing your success with those who helped you get there. Looking forward to seeing what W+R Studios and Lone Wolf can do together!

  8. That’s fantastic! Congrats Greg, Dan, and the W+R team! You guys are one of the highest producing teams in the biz. Lone Wolf obviously sees the tremendous quality in W+R. Thank you for your undeniable contribution to the real estate industry. As agents, we greatly appreciate it. I’m looking forward to grand possibilities, great new features, and wonderful new toys. You all rock!

  9. Congratulations to you Greg, Dan and the entire W+R Team! Everyone I’ve ever met at your company has been great; hard-working, friendly, kind, ambitious! I’m quite impressed by you Greg and Dan sharing the first MILLION with the team! You guys are a class act, but you’re also putting your money where your mouth is and treating your team like family…you share with your family right?
    Last I would just like to say, just like your long standing photo on Vendor Alley…it took real brass balls to post these meeting notes to your blog for everyone in the industry to read…while many get as ‘transparent’ as a press release you’re laying it all out there for is to read…thanks for letting see behind the curtain!
    Good luck and I am excited to see what comes next!

  10. Congratulations and kudos to you on your transparency and generosity. The real question – the big Wolf isn’t making you shut down Vendor Alley, are they?

  11. You guys are a true class act. The sharing of the 1st Million is amazing.
    Way to go and God’s speed. We are proud to be part of you success.

  12. Congrats to all of you. Sharing the bounty was an excellent example of your character as business leaders, Greg & Dan. Well done! Good luck going forward, and please keep cranking out your Vendor Alley snarky-blogs to give us in the business a fun way to get our industry news.

  13. Congratulations! I have to admit that when I first heard about it, I thought, “aww man, another good company gobbled up”. After reading your transcript though, I think you did the right thing for you and your team, and I’m impressed with your generosity. Best wishes to all of you!

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