“For example, I believe CoStar can move quickly to democratize the digital twin by allocating future blocks of Homes.com’s $1 billion ad campaign to influence consumers to think a fully immersive 3D tour is the only way to get the most value for a home. It can then advance Matterport’s mobile capabilities to make it easier than ever to publish its experience to the homebuying public.”
Craig Rowe, Inman News
The above quote is just a tidbit of Craig’s great insight and analysis on the Matterport deal. One small quibble I would ended the article with a different quote;
On a recent Facebook post agents are commenting on some sort of notice going out. You remember, Glide was recently acquired by Compass. Can anyone confirm?
The first 4 months at Lone Wolf have been an awesome learning experience for me. Lone Wolf and W+R Studios have always had mutual customers, and I was always aware of the forms and transaction management business but now I’m getting a full immersion course. What I’m learning the most is this, at scale, it’s a tough business. I know that competition is starting to rise in this space, I would only say to them, be careful what you wish for.
With that in mind, I sat down to talk with Lone Wolf’s CEO, Jimmy Kelly. I was surprised but not surprised that he agreed to do this interview with me. I don’t think we made any edits or cut anything out, it’s about 30 mins long and worth the watch. Jimmy answered all my questions, even the tough ones (check out the timeline), and I still have a job!
Hope you enjoy and see how running a form business during the beginning of a worldwide pandemic is a little like Lucy and Ethel working at the chocolate factory.
Timeline:
:40 – Introduction to Jimmy, and history in software industry
4:20 – Greg and Jimmy discuss forms changes and frequency of requests
5:15 – Looking back on pandemic, COVID requests, and response from Lone Wolf
9:30 – Greg asks about product outages, instability. Jimmy discusses what’s going on at Lone Wolf.
12:00 – Greg: What do you say to customers who’ve heard that before?
16:05 – Jimmy discusses future of Back Office.
17:45 – Greg: Are Transactions (zipForm Edition) and Transactions (TransactionDesk Edition) eventually going to merge?
20:00 – Greg: What do you say to customers who want you to focus on current issues rather than innovating/buying companies?
23:45 – Jimmy previews what he’s most excited about coming soon from Lone Wolf
29:00 – Greg: What can you share about Stone Point Capital acquiring CoreLogic?
“HW Media, publisher of HousingWire, FinLedger, and producer of Engage Events, today announced it has closed on the strategic acquisition of REAL Trends, the residential real estate industry’s leading report that ranks the performance of the top U.S. brokerage firms.
REAL Trends will continue to publish the REAL Trends 500, The Thousand, and Website Rankings reports on an annual basis, as well as produce the Gathering of Eagles and DealMAKERS events. Together with HW Media brands HousingWire and FinLedger, the company will reach over 11 million real estate, mortgage and fintech professionals each year”
Looks like Steve will continue with his M&A advisory business. So far I’m not such a big reader of Housing Wire (although I am a subscriber), it has a lot of focus on the mortgage industry and less on the residential real estate space, but I have seen that start to shift a bit.
I can imagine it’s hard to get that mix of news right. I do hear good things about HousingWire’s CEO Clayton Collins and I can imagine he is thinking a lot about this. I know from my perspective that I have little interest in what’s happening in the mortgage banking or title industry, and I think that is the same for the majority of real estate agents. But as new business models evolve it might be more important for company leaders to be educated on all facets of the real estate transaction.
Congrats to Steve, I can’t remember a time when there wasn’t a REAL Trends, and it’s great to see his legacy survive.
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.
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.
“In a statement, Irvine, Calif.-based CoreLogic today said its board of directors has “unanimously concluded that the unsolicited proposal significantly undervalues the company, raises serious regulatory concerns, and is not in the best interests of its shareholders.” Chairman Folino said that his company is open to “all viable paths to increasing shareholder value,” and is willing to meet with Cannae and Senator. However, given what he described as CoreLogic’s “strong momentum, increasing margins and accelerating growth,” the company could deliver more value on its own.
He also noted that the proposal failed to address “the serious regulatory concerns” raised by significant overlaps between CoreLogic and the network of companies associated with Cannae’s chairman, including Black Knight and Fidelity National. Cannae is led by Bill Foley, the chairman of Black Knight, a data and analytics company that directly competes with CoreLogic.”
“Headquartered in Denver, CO, Homebot was founded in 2015 by Ernie Graham (CEO) and Ira McMahon (CTO). Ernie and Ira, with previous experience at Realtor.com, saw an opportunity to create a software solution that empowers all three parties involved in a home transaction – homeowner, mortgage lender and real estate agent – with the data and communication tool they needed to be successful. Today, Homebot serves thousands of loan officers nationwide and achieves an average 50% monthly engagement rate across millions of homeowners. The current Homebot leadership team – Ernie, Ira, and Michael Lynch (COO) – will continue to lead the business in addition to their newest member, Charlie Pratt, who joins as CRO.”
Congrats to Ernie and his team. Things are heating up!
“Elm Street Technology offers a simplified platform called Elevate, for real estate technology and marketing services, that aims to provide a single vendor and point of contact to maximize business leads. The Elevate platform is currently used by tens of thousands of real estate agents, teams and brokerages across the United States. It offers a variety of seamlessly integrated tools including IDX websites, lead generation services, CRM, email, social, text and blog marketing automation, recruiting and retention campaigns, and more, all backed by zealous support and education teams.
“Aquiline is the perfect partner to help Elm Street Technology accelerate its growth strategy,” said Prem Luthra, President and CEO of Elm Street Technology. “With Aquiline, we will be able to broaden and accelerate our sales and marketing capabilities, enhance product development and increase our focus on strategic acquisitions that will allow us to better service the increasing demand for technology to automate and streamline the day-to-day activities of the busy real estate professional.”
Still a lot of appetite for real estate technology companies out there. Congrats to Prem and his team as they continue to grow.
On January 1, 2010, organized real estate was still reeling from the recession. Dale Stinton was steering the ship at NAR. Zillow was seen as the enemy of the MLS. Real estate software was meh. Agent teams were rare. Nearly all brokerages took a split. Selling your house online seemed outrageous. And we still signed documents in pen.
On this episode of Industry Relations, Rob and Greg are looking back at the last 10 years in real estate. They discuss the passing NAR’s MLS Statement 8.0 Clear Cooperation Policy, debating the significance of the office exclusives loophole and how it might lead to government involvement. Our hosts also express their disappointment around the Newsday investigation in Long Island, Testing the Divide, challenging brokerage leadership to make a strong statement against the egregious racism it uncovered.
Greg and Rob go on to share their top 10 defining moments and trends with the biggest impact on the industry over the last decade, describing how the rise of agent teams, 100% commission brokerages, the iBuyer model and consolidation have transformed organized real estate. Listen in for insight into how NAR’s decision to fund RPR and Upstream changed the way the MLS saw Zillow and explore how the space has evolved from 2010 through the end of 2019.
Editor’s Note: We did record an Episode 40 that was never aired. It was about Policy 8.0 but wasn’t ready before the vote. After the vote passed we decided it didn’t add to anything to the issue.
“The four-year-old, North Carolina-based technology startup is known for creating the First app, an intelligent coaching platform that makes it easy for agents to identify likely sellers within their own network of contacts. With a focus on helping agents identify future listings, the app prioritizes who agents should reach out to and when, so they may strengthen current relationships when it matters most. It also organizes and consolidates an agent’s database and provides reporting on how much business is both won and lost from within an agent’s network.
“We have set our sights on becoming the global leader in real estate technology, and the acquisition of First is evidence of that steadfast commitment,” said Adam Contos, RE/MAX Chief Executive Officer. “With First, we found next-level talent combined with a game-changing service, delivering exclusive access to one of the best products for agents out there today.”
Big congrats to Mike Schneider of First and Adam Contos of RE/MAX. It will be interesting how they weave this in with their acquisition of booj last year.
So, the vendor consolidation continues. The year started with another CRM company, Contactually being acquired by Compass and BoldLeads being acquired by PropertyBase. ShowingTime acquired CSS. OJO Labs after acquiring Wolfnet in 2018, just acquired RealSavvy and chief puppy killersScott Smith and Tom George of Constellation Software bought Offrs and SmartZip.
I believe First was represented by T3Sixy in the capable hands of Michele Conn. Seems like they might getting busier in the months to come.
