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In an effort to dispel some of the “mythunderstandings” behind Gary Keller’s presentation at Inman Connect, I decided to pay for the full transcript of the 38-minute exchange with Brad Inman.
Feel free to share this transcript with anyone you know in the real estate industry.
FULL TRANSCRIPT
Gary Keller: Where are we going? Right here? Where are we sitting?
Brad Inman: Is that okay?
Gary Keller: All right.
Brad Inman: Or do you want to be near here? Here. Gary brought his flip chart.
Gary Keller: I did.
Brad Inman: It’s a special one. So, Dr. [Slido 00:00:27], ask our wonderful audience [00:00:30] one word to describe Gary Keller, and then it’s time for you and I to chat. By the way-
Gary Keller: Be sure my wife is getting in on that.
Brad Inman: Yeah, well, you had plenty of fans here.
Gary Keller: Yeah, yeah.
Brad Inman: Thank you very much for doing this.
Gary Keller: You’re more than welcome.
Brad Inman: The enthusiasm by our audience, some love you. Some aren’t so sure, and a few don’t know you.
Gary Keller: I feel the same way.
Brad Inman: Yeah. Let’s start with that actually, and then you’re going to kind of share your vision like [Kaliah 00:00:58] did, and I think it’s going to be really interesting [00:01:00] to the crowd. But who is Gary Keller? Just give us a little …
Gary Keller: Oh, wow, okay. I’m a-
Brad Inman: By the way, you’re a leader, innovative and a visionary according to our audience.
Gary Keller: Wow. I don’t want to waste time talking about that. What do you want to know about me?
Brad Inman: Well, what’s one thing? Is it true you’re going to put realtor on your gravestone?
Gary Keller: Yes.
Brad Inman: Wow, that says a lot.
Gary Keller: Well, someone asked me once, I mean, professionally, right? What I wanted to, my [00:01:30] legacy. I said, “I want to die being a realtor. I want it to say on my headstone I was a realtor.” I have a degree in real estate, right? Got out of college in the late 70s, was one of the first people to have a degree and was a broker at 21, and I’ve never gotten out, right?
Brad Inman: So you live it. You love real estate, right?
Gary Keller: Yeah, I sold 6 homes in my first month in a city I’d only been in once. By the time I was 26, I was vice-president of the largest real estate company in my market. No, I love this business. It’s a great business.
Brad Inman: Yeah. Let’s now jump into … [00:02:00] I think my question to you on this one is lay out where you think it’s going because we’ve got competing theories on the future that we’re going to really bear down on the next couple of days, and I think yours is important. We got you a couple of magic markers. We got an eraser, and we got a film crew that’s going to zoom in on it so that they can see it.
Gary Keller: I’m going to do this so you can see it.
Brad Inman: We’re going to put a clock on you, gang in the back, of 10 minutes.
Gary Keller: Fifteen.
Brad Inman: Ten. Ten.
Gary Keller: [00:02:30] Okay.
Brad Inman: But you’re going to talk for 45. It’s just 10 on this part.
Gary Keller: Yeah, yeah, yeah. So the question you asked me was where’s the industry going. So I thought about that, and I kind of want to diagram it, and then we can talk through that.
Brad Inman: Sure. Let’s do it.
Gary Keller: So, if you think about any business out there, right? There’s three paths it can go. It can go this way. It can go this way, and it can go that way, right? So, there’s three phases to building a business [00:03:00] in any industry. There’s this phase. There’s this phase, and then there’s one of those three, right?
Brad Inman: Is that individual business or the industry?
Gary Keller: This is a business inside of an industry.
Brad Inman: Okay, got you.
Gary Keller: So, what happens is you have this period of, what I would say, trial and error. So, businesses start. Businesses go out of business, into business. They try all kind of things, and at some point, the people that have made it get to this point. At that moment in history, and it shows up for every [00:03:30] business, this is where the real innovation occurs.
Brad Inman: Where is Compass and eXp? Are they in that first big circle? I didn’t mean to throw you off.
Gary Keller: Well, no, you didn’t at all. By the way, no one’s in the circle yet.
Brad Inman: No one’s in the circle.
Gary Keller: So I just had to think about that for a second.
Brad Inman: I’m not in the circle? Damn.
Gary Keller: But you can be in the circle, okay?
Brad Inman: Okay.
Gary Keller: Let me put Brad right there. You’re in the circle.
Brad Inman: Yay.
Gary Keller: No, by the way, I believe that every firm, whether they’ve been in business for [00:04:00] a year, five years, 10 years, 100 years, I think all of us are right there. So, when I talk about, and I made the statement in February. I got on stage and said that in the next year you won’t recognize the real estate industry. I wasn’t kidding. What’s interesting is the amount of change that we’re all feeling is real and palpable, and it’s happening. That’s going to accelerate right there. So let me explain what I mean by this.
Brad Inman: So, you’re saying this stuff, we’re just in the first inning. It’s coming.
Gary Keller: [00:04:30] Nothing’s happened yet.
Brad Inman: Yeah, got you. Okay, go ahead.
Gary Keller: Nothing’s happened. I’m serious about that. Nothing’s happened, but it’s fixing to happen, okay? It’s fixing to happen. So, let’s ask what causes that, okay? So, what causes that is we started out in the world with hardware, right? Hardware was invented. At some point, you had software to run the hardware, right? One of the most interesting decisions in the world is that IBM, [00:05:00] who created the hardware, decided not to own the software, and they gave one of the greatest deals of all time to Bill Gates and Paul Allen to own the software, right?
So then, all of a sudden, at some point, you’re using your hardware, your phone, and you’re using software, and you get this offer to buy a data plan because you were out of space. So someone came up with the idea of how about if, and they called it the cloud. How about if we just string computers together, [00:05:30] and we put all your data there so you can access it from any technology hardware that you want to use, right? Okay. Well, here’s the interesting thing about that. That’s a commodity. For about $1,000 or less, I can buy a piece of hardware. I can buy a piece of software or multiple softwares, and I can buy a data service, and I’m in business, right?
Brad Inman: Yes.
Gary Keller: Okay. That’s a commodity. What’s changing the world today, and it’s called the fourth industrial [00:06:00] revolution, and that is-
Brad Inman: Anyone put teacher or professor up in their one-word description?
Gary Keller: … is data powered by artificial intelligence. That’s it. So, everything that we have, anything that’s been invented by any of us prior to what’s coming has all been, the industry’s all been about this, the latest gadget, the latest idea, the latest [00:06:30] thing. Cool. That’s great. That’s what that is, by the way. But this right here, big data that is being powered by artificial intelligence, that … And, by the way, it doesn’t matter what industry you’re in. It doesn’t matter if you’re in real estate. This applies to all industries. By the way, the medical profession, the legal profession, the architecture profession, any profession you want to name is at this moment.
The reason is because you have two worlds that we live in. The first one is the [00:07:00] physical world, and the second one is the digital world. What happens is everybody who’s physically based, all their businesses, they wake up. The fatal question they say is, “What’s the least I have to do in the digital world to protect what I currently have physically?”
The challenge is that the people who are in the digital space wake up every morning, and they say, “What’s the least I have to do physically to kick your physical butt?” Right? Okay. So, this is the battle. The battle is over big [00:07:30] data, okay, powered by artificial intelligence. So, let’s look at the real estate industry.
Brad Inman: You should sign that, Gary, because some people will pay me.
Gary Keller: Yeah, whatever.
Brad Inman: I’m a capitalist.
Gary Keller: Okay. So, let’s look at the real estate industry real quick and why we feel this change going on, Brad. Industry starts out as real estate agent. At some point, we have the tech-enabled real estate agent, okay? MLS being a good example of that, [00:08:00] technology enabling the real estate agent. Does that make sense?
Brad Inman: Where does the MLS come in? I’m confused.
Gary Keller: It’s the technology that enables agents to do their jobs.
Brad Inman: Yeah, MLS.
Gary Keller: MLS is an example of where technology showed up to enable the agent, okay?
Brad Inman: Yeah, got you.
Gary Keller: Then the next thing is all of a sudden, we have this thing, and it’s called the agent-enabled tech. Got it?
Brad Inman: What’s that?
Gary Keller: Well, okay, and by the way, the fourth would be the prediction that someday you just have tech. [00:08:30] Well, the interesting thing is that will never happen, and that ship has sailed. So you can literally take our industry and put it in a box like this and say, “You’re going to be one of two people. You’re either going to be an agent who is enabled by tech, or you’re to be the agent that is enabling the tech.” So now, let’s talk about-
Brad Inman: Let me just bring you down a little bit. Tell me exactly what that means. What’s the difference?
Gary Keller: Well, the agent is the fiduciary here, [00:09:00] and the tech is the fiduciary there. This is a battle over who’s going to be the fiduciary.
Brad Inman: So that might be-
Gary Keller: Who’s the rock star in the experience?
Brad Inman: So it might be Smart Contracts, all of the tech taking care of that stuff, to be the fiduciary?
Gary Keller: We’ll get there is just as second. That’s right. So, let’s now list these.
Brad Inman: Running out of time. That’s what I’m worried about.
Gary Keller: No, you’re not.
Brad Inman: Yeah, I am.
Gary Keller: No. No, we’re not.
Brad Inman: I love this guy. If you saw our email banters, you would just think [inaudible 00:09:30].
Gary Keller: No, [00:09:30] we’re not because when you invited me you said I could do what I wanted.
Brad Inman: No, you’re doing a good job.
Gary Keller: Okay, good.
Brad Inman: Touche. I love that.
Gary Keller: You did. I have the email.
Brad Inman: Okay. You’re losing me.
Gary Keller: We’ll post it. Yeah, I love you. You’re awesome. All right. So, by the way, realtor.com started that whole mess, okay? Then we have Zillow. You have Trulia. We can throw Redfin into that. We can throw Purplebricks [00:10:00] into that. We can thrown Opendoor into that. We can throw Offerpad into that. Pretty much all the people that Inman News worships. I love Brad. He knows I love him, but we’re-
Brad Inman: Because they’re really smart people, Gary.
Gary Keller: Well, okay. And they’re not? Okay, whatever.
Brad Inman: But [00:10:30] you’re losing me on this.
Gary Keller: Okay, hang on a second.
Brad Inman: The agent-enabled tech, you’re saying all of these players on the right have agents.
Gary Keller: Well, they’re agent-enabling tech.
Brad Inman: But they’re all tech-driven companies, correct?
Gary Keller: I will tell you that every one of these companies have agents because they have to, not because they want to.
Brad Inman: Got you.
Gary Keller: These are not agent-centric businesses. If they could do it without, if Glenn Kelman could run Redfin without agents, he’d do it in a heartbeat. If he tells you otherwise, he’s lying, okay?
Brad Inman: Well, he’ll be here in an hour to defend it.
Gary Keller: Well, I’ll be happy [00:11:00] to stay, but I’m just telling you that he’s in that category, okay? Absolutely. Yeah, and he loves that category, but that’s who he is, okay? You with me? So, the reason why you and I get off to rocky starts at times-
Brad Inman: Yeah, that’s all right.
Gary Keller: … is because well, because I’m over here.
Brad Inman: You’re over there.
Gary Keller: I’m over here. I work for the real estate agent. I have my whole life. I’ll go to my grave on my gravestone saying that.
Speaker 1: Hurrah!
Gary Keller: Yeah, [00:11:30] yeah. So, well, I’m not going to get there too soon. All right? So, if you look over here, when Inman … and I love what you do, by the way. I wouldn’t have come here if I didn’t appreciate you. I really wouldn’t have. I’d have just said, “Kiss my ass. I’m not coming.” I didn’t say that.
Speaker 1: Yeah. No, you didn’t.
Gary Keller: No, I didn’t.
Speaker 1: It took a while to persuade you, though.
Gary Keller: Well, it did because people that work with me are more important than people that don’t. [00:12:00] I mean, I get paid to help certain people, and other people-
Speaker 1: Well, we’re grateful you’re here, and I want you to sit down with me-
Gary Keller: Okay, hang on.
Speaker 1: … so I can chat you up.
Gary Keller: Okay, hang on. Hang on. Hang on. So, here’s where the challenge comes in, and that is when … and I’m not picking on you, by the way because I read pretty much everything that’s written through your news service. So, I want to respect that. The reason why you and I get crosswise at times is because [00:12:30] you represent these guys as the disrupters. Over here, the articles are already “Three Ways to Have a Better Open House,” “These Are Going to Kick Your Ass and Change the World,” “Five Ways to List FSBOs.” Right? Go back and check, and you’ll see it. This absolutely treats these individuals as if they’re not disrupters, as if they work for this group. Now, here’s another interesting fact about this group. Every [00:13:00] one of these groups, I can put the aggregators over here.
Gary Keller: One of these groups. I can put the aggregators over here, and they want to reduce the agent’s income by at least 30 percent or more. Right? So if you’re-
Brad Inman: They wanna do what?
Gary Keller: Reduce their income. So the real estate agent, if they do business with these guys they’re gonna operate at about a two percent approximate commission.
Brad Inman: But if they-
Gary Keller: But if they were charging three-
Brad Inman: But, hold on Gary. If they deliver a volume of transactions-
Gary Keller: Well, be careful.
Brad Inman: -they make up for the difference. [crosstalk 00:13:26].
Gary Keller: You need to be careful with that, ’cause you’re talking to the guy who wrote the book on it.
Brad Inman: Yeah, but you got … [00:13:30] You got 100,000 agents-
Gary Keller: No, no. No. No, no, no. No, no. No, no. No. I’m gonna give you a number here. 10 percent. If you’re spending more than-
Brad Inman: 10 percent of what?
Gary Keller: Of your gross income. For leads.
Brad Inman: Yeah.
Gary Keller: I wrote a book. And, I write?
Brad Inman: Yeah.
Gary Keller: Okay. There isn’t anyone that-
Brad Inman: How many … How many in the audience think Gary’s book applies as much today as it did when he wrote it? Say yes. And, how many think-
Gary Keller: Well.
Brad Inman: -it doesn’t apply quite [00:14:00] as much as it did when he wrote it?lets just see what people think.
Gary Keller: Heres the interesting thing about that. So, we sit down-
Brad Inman: That’s for Doctor Slido. Did you get that? Doctor Slido.
Gary Keller: Okay. So we sat down a year ago to write the MREA [inaudible 00:14:13] updated version, right?
Brad Inman: Right.
Gary Keller: Heres what we found out. Everything that’s in that book is 100 percent accurate today except for the actual numbers.
Brad Inman: Well, we wanna ask the audience if they agree with you.
Gary Keller: Well, they-
Brad Inman: Doctor Slido, are you on this? How many think Gary’s book is as relevant today as it was when he [00:14:30] wrote it, and how many think it is not?
Gary Keller: One, caveat. You have to put your income down by your answer,-
Brad Inman: Okay. Well, let’s-
Gary Keller: -because I will tell you that anybody who would say that it’s not relevant today are your least earning people in the room.
Brad Inman: My audience has a higher income than your community Gary, ’cause they paid a lot to come here. And, … But, anyway.
Gary Keller: Okay. Okay, so heres my point to you. My point is, is that I’m absolutely the leading expert-
Brad Inman: [00:15:00] We’re gonna be friends when this is all over, by the way.
Gary Keller: Oh, of course. I like your shoes.
Brad Inman: Hey, Doctor Slido. How we doin’?
Gary Keller: Okay, timeout.
Brad Inman: Doctor Slido.
Gary Keller: Now, you’re taking my time by asking some guy. So, stop that.
Brad Inman: Well, it’s a conversation Gary.
Gary Keller: Okay. So, heres the thing. That’s the cost for a lead. If you’re spending more than that you better have good justification. You with me?
Brad Inman: Yeah.
Gary Keller: Now, that’s just what the research says. And, I spent all my time … This is what I do, by the way. Now, you get into this group. These guys want that commission to be one to two percent as [00:15:30] well, correct? Redfin?
Brad Inman: Redfin, okay.
Gary Keller: Mm-hmm (affirmative). Yeah. Purplebricks wants it to be, maybe, one percent to one and a half percent max. Opendoor will pay you one percent. Offerpad will pay you one percent. This is why you feel the way you feel about change. Is, because all of that group wants tech to be the rockstar and wants the agent to be the-
Brad Inman: Yeah. But, don’t-
Gary Keller: -functionary.
Brad Inman: Lemme just ask you one question Gary.
Gary Keller: Mm-hmm (affirmative). [00:16:00] And, it doesn’t have to be like that.
Brad Inman: You spread this thing, which I think the industry’s been good at, which is fear. Which is the wake up every morning maliciously trying to go after the real estate industry.
Gary Keller: Well-
Brad Inman: And, I don’t … You meet with …
Gary Keller: It’s a-
Brad Inman: You cut deals with Zillow. You’ve cut deals with Realtor.com. I know for a fact you met with the disruptors. You’ll cut a deal with anyone on their behalf. So, if they were that malicious-
Gary Keller: On whose behalf? On whose behalf?
Brad Inman: -why would you let ’em into your office, right? I mean, you have a deal [00:16:30] with Zillow, correct?
Gary Keller: Do it?
Brad Inman: I presume you do. I [crosstalk 00:16:35]-
Gary Keller: I don’t think I do.
Brad Inman: You have no deal with Zillow?
Gary Keller: What’s my deal?
Brad Inman: To protect the listings from having-
Gary Keller: Oh, no. They bought that agreement with Dotloop. I didn’t sign a deal with Zillow.
Brad Inman: So, you have no deal with Zillow?
Gary Keller: No. Why would-
Brad Inman: You don’t do business with any of these people.
Gary Keller: Why do I do business … What do I do with Zillow? I don’t have listings.
Brad Inman: I’ve heard through the grapevine. Obviously, we don’t publish it, ’cause-
Gary Keller: No, I have an agreement with Dotloop.
Brad Inman: Okay.
Gary Keller: But, they can’t use our data.
Brad Inman: Right.
Gary Keller: Now, Zillow’s come back to us and they’re now asking [00:17:00] that we give them their data.
Brad Inman: I guess my point is-
Gary Keller: They just recently asked for that.
Brad Inman: And, that you’re-
Gary Keller: What was my answer?
Brad Inman: Your agents are sitting across the table from Redfin. They’re sitting … They’re spending money on Zillow. These are smart people-
Gary Keller: Yeah.
Brad Inman: -that are investing in things. They’re not that stupid, are they? Gary you gotta sit down. I’m gonna get … Come one, just sit down.
Gary Keller: Okay. I’m gonna do one more thing.
Brad Inman: Okay, really quick. This is taught … Barry [inaudible 00:17:20] did this to me. Barbara Corcoran-
Gary Keller: No, no. No, no. No, no.
Brad Inman: They are people that can take the stage away from Brad Inman. But, it’s fine.
Gary Keller: I’m not trying to do that.
Brad Inman: I’m very relaxed and comfortable.
Gary Keller: So, the last [00:17:30] thing I’ll say then is this. And, that is … So, that’s the challenge.
Brad Inman: Yeah?
Gary Keller: So, the real estate agent gets to vote with their feet. So, by the way this group, if this group doesn’t own it’s tech, it’s gonna succumb to that group.
Brad Inman: Gotcha.
Gary Keller: That’s my point.
Brad Inman: Yeah, I got that.
Gary Keller: Yeah. If you put someone between you and the customer and you let technology get between you and the customer … Heres an interesting number for you. One billion dollars. That’s the amount of money that we surveyed, and we estimate that our own real estate agents spend on technology [00:18:00] outside of Keller Williams. A billion dollars Brad. I don’t get paid a fraction of that.
Brad Inman: But, historically the industry’s paid 12 to 15 billion dollars for advertising. Whether they gave it to the Chicago Tribune, or they gave it to Billboards, or they gave it to bus sings, or whether they gave it to Zillow that money … So, a billion. I mean they’re spending, they’ve always spent billions marketing. Haven’t they?
Gary Keller: This isn’t marketing.
Brad Inman: Didn’t you always spend money on marketing?
Gary Keller: This is not marketing dollars.
Brad Inman: Yeah?
Gary Keller: These are operational dollars. I didn’t say-
Brad Inman: I’m sorry. Give … [00:18:30] Do it again. So, I missed it.
Gary Keller: On software.
Brad Inman: Oh, in software. They’re spending one billion dollars in software.
Gary Keller: And, the reason why the software vendors don’t like me today, is-
Brad Inman: Right.
Gary Keller: -I’m literally taking that spend to zero.
Brad Inman: Yeah.
Gary Keller: My goal is to reclaim a billion dollars-
Brad Inman: But aren’t you gonna sell technology to your agent? Isn’t that part of your business model?
Gary Keller: No, it’s $300 a year.
Brad Inman: What? But, that’s $300 a year. Times 150,000-
Gary Keller: Well, compared to Sync that would charge the same amount to an agent.
Brad Inman: Yeah.
Gary Keller: Anywhere from 18 to 100. I’ve got agents in the audience that spend $300,000 a year on technology alone.
Brad Inman: [00:19:00] Yeah.
Gary Keller: By the way, in about three months they’ll be spending that much. $300.
Brad Inman: Come sit down with me.
Gary Keller: So, last thing.
Brad Inman: Gary.
Gary Keller: So, heres the issue. So, when you talk about … It’s the last thing. You’re getting an education. It’s good for you. Well, here’s the thing. Is, when I stood up and said that we were becoming a technology company, man. I took a beating from everybody. They thought I was a dumbass.
Brad Inman: Yeah. Well, you said [00:19:30] it and no one knew exactly what you were building.
Gary Keller: I didn’t want ’em to know.
Brad Inman: But, it was quite a declaration. I’m spending a billion dollars on technology. You would automatically [crosstalk 00:19:42]-
Gary Keller: Okay. So, if I let somebody build my technology for me what do I own?
Brad Inman: Say it again.
Gary Keller: If I let someone … I mean, let me ask you a question. Does Amazon own their software, or do they buy it from Fidelity?
Brad Inman: They own it.
Gary Keller: Does Amazon own their software or do they buy it from … Pick a company.
Brad Inman: I don’t know. [00:20:00] You tell me, I don’t know.
Gary Keller: You know the answer.
Brad Inman: Well, I assume-
Gary Keller: Amazon owns their software. Facebook owns their software. Yes?
Brad Inman: Yeah.
Gary Keller: Netflix owns their software, right?
Brad Inman: Yeah.
Gary Keller: Okay. So, why would we tell the real estate agent, “Don’t own your software.” Or, don’t let your company you’re in partnership with … Why would we tell them not to own it? That’s a dumbass statement man. That is … That you’re literally heading them to the slaughter. Not you, ’cause you don’t say that. But, I’m saying anyone who says that is literally [00:20:30] leading the real estate agent by the nose.
Brad Inman: Now would you sit down with me? I ask you as a gentleman.
Gary Keller: I know you did, but I haven’t finished.
Brad Inman: Come on Gary. Sit down with me.
Gary Keller: No, no. No, no. We got one more thing. So, here’s what changes the world. So, there’s a difference between software and platforms. Our industry doesn’t really understand this. Okay? And, that is if you wanna build an innovation engine, Brad, in order to build a platform that you can innovate on top of the technology, the first thing is you have to build a cloud [00:21:00] service. Now, this isn’t a cloud service like I was talking about. This is an industry specific cloud service. How long does it take to build an industry specific cloud service? About two to three years. That’s what Google tells me. That’s not how long it took us to do it. About two to three years. Okay? Second thing … By the way, you have to have … In order to make it significant you have to have the data. So, tomorrow morning if EXP announced that they were gonna build a cloud service you’d say, “well, that’s good. But, where’s the data? You don’t have any data.” [00:21:30] Okay. But, if they had the data and they were gonna build a cloud service it would take ’em three years.
If Compass today said, “We don’t have a cloud service, but we’re gonna do it.” And, they don’t have one by the way. But, if they said they were gonna do it it’s gonna take ’em two to three years. You with me? Okay. Here’s the problem with that. The problem with that two to three year time frame is it’s happening right now. If you don’t already have it you’re in second place. Okay? Now, here’s the other thing. And, that is you have to have artificial intelligence. Why? [00:22:00] So, here’s a good example. So, let’s just think about this for a second. Let’s say that you have a agent software, and you have real estate company software. So, in the real estate company software we have all the data on production of everybody in the business, right? So, then we have the agent. So, tomorrow morning the agent goes out and they take a listing. But, because all the data on …
Days on market and price to sell ratios, [00:22:30] all of that’s down here. The second the agent takes the listing artificial intelligence sends a ping to them and says, “For a home in that price range in this neighborhood, you should use smart plan number 12 with these attributes. Would you like us to execute it?” If the agent clicks yes the whole plan is initiated in an instant over a 12 week period.
Brad Inman: Okay. Let’s throw out some questions to the audience. Can we use Doctor Slido?
Gary Keller: That was his way of getting control.
Brad Inman: No, no.
Gary Keller: Good job. [00:23:00] Yeah, it was.
Brad Inman: Great. No, I learned a lot Gary.
Gary Keller: Yeah, you did.
Brad Inman: Doctor Slido at … Whatever we need to do for you all to submit questions. And, then we’ll get some of those questions up. I think they’ll pop up right here, and we can answer one of them.
Gary Keller: So, here’s the challenge.
Brad Inman: Yeah, yeah.
Gary Keller: So, I’m just … I’m trying to educate you. So, the problem is-
Brad Inman: No, I need to be educated.
Gary Keller: Well, the point is is that everything that we’re dealing with today around software is bolt on technology.
Brad Inman: Yeah.
Gary Keller: I read the latest article you just wrote, you published yesterday. And, it said, “Here’s the three rules for technology.”
Brad Inman: Yeah. What did [00:23:30] we say?
Gary Keller: Well. Number one, you said it needs to talk to each other.
Brad Inman: Yeah.
Gary Keller: Right? You have your-
Brad Inman: Is that a good thing?
Gary Keller: Why are you gonna … If you don’t have that it’s not going to talk-
Brad Inman: Right.
Gary Keller: -to each other. So, when I read that article I went, “Jeepers. You shoulda taken a poll by Doctor Slidell or whatever.” And ask him how much-
Brad Inman: Slido.
Gary Keller: Whatever. How much of their technology’s actually gonna talk to each other.
Brad Inman: Yeah, yeah.
Gary Keller: Brad, it doesn’t talk. We have agents out there-
Brad Inman: I talked to a consultant yesterday, and this whole business is to work with broker-owners [00:24:00] on integration.
Gary Keller: No, no. No. Just call me. [crosstalk 00:24:03]. Integration. If you do that it’s integrated.
Brad Inman: I’m agreeing with you Gary. Slow down. And, the fact that we’d even need an industry to help integration shows that we have a problem. So, what are we asking?
Gary Keller: Yeah.
Brad Inman: Any questions from the audience? Oh, here we go. What does … Will you own … Here’s a KW agent. Will you own my data as a KW agent? In other words, will you own his data?
Gary Keller: Yeah. Yeah, yeah. Yeah. Yeah, well own it with them.
Brad Inman: With them?
Gary Keller: Sure.
Brad Inman: So, this whole confusion [00:24:30] about data ownership, you’ll own it with them?
Gary Keller: Well, someone’s gotta own it.
Brad Inman: Yeah.
Gary Keller: In other words, whoever owns that cloud service and that artificial intelligence is gonna own that data. Now, here’s a question I’d have you for that person.
Brad Inman: Yeah?
Gary Keller: Someone’s gonna own it. Would you rather a real estate company that has a history of being the most centric on the planet, right? Here’s another number for you. Billion dollars in profit sharing paid out. Now, I invite anyone in this room who’s paid out a billion dollars to their people in a profit share program-
Brad Inman: Are you still doing that, by the way?
Gary Keller: Why wouldn’t I?
Brad Inman: I mean, that’s according to your program, right?
Gary Keller: [00:25:00] Yeah.
Brad Inman: Profit sharing.
Gary Keller: Yeah.
Brad Inman: And, is that still driving your growth the same as it has?
Gary Keller: I wouldn’t think so.
Brad Inman: Now. What is driving it now? Community?
Gary Keller: Technology.
Brad Inman: Technology? They’re coming to you for technology.
Gary Keller: Yeah. Here’s another number for you. Six billion dollars, and that’s the amount of productive volume that joined Keller Williams in the first 90 days of 2018.
Brad Inman: Let me ask you this. Do you feel like … This has been going for 22 years. We’ve been talking about robots of five years here, years. We’ve been talking about all the things you have up on that board. Why is it … [00:25:30] Were you a little late to the game too?
Gary Keller: I’m not … No, there’s a difference between late and too late.
Brad Inman: Timely. You were timely.
Gary Keller: Well, actually I think we showed … No. I actually think we’re the only one on time.
Brad Inman: Yeah.
Gary Keller: And, I think you’re gonna see that in the next couple of months.
Brad Inman: Now, you told me backstage you’re launching something later this year. Tell the crowd what that is.
Gary Keller: Well, we don’t launch things.
Brad Inman: Okay.
Gary Keller: So, again I’m gonna get back to this point right here. The challenge that you have is, if you haven’t already built an innovation platform-
Brad Inman: Yeah.
Gary Keller: – [00:26:00] you’re two to three years late. And, the battle is gonna be over the consumer.
Brad Inman: Yeah.
Gary Keller: So, one …
Gary Keller: You’re two to three years late. And the battle is gonna be over the consumer. So once it’s- One last thing, just think about this. So if we think about the consumer, and we think about- By the way if you want to be Netflix, number one you have to own your software. Number two, you have to build an end to end consumer experience right that’s personalized as you use it. Right?
If you go to your Netflix account mine does not look like yours. If I go to my Amazon page, mine doesn’t look like yours. [00:26:30] Right? Okay.
So that’s interesting to point that out because if you think about the consumer experience as voyeurism to search, to consideration, to close, to ownership. And we put those in buckets. You realize that voyeurism and search is the only thing that actually is out there today for the consumer.
Brad Inman: I would agree with that.
Gary Keller: Yeah we don’t have online transaction yet.
Brad Inman: Right.
Gary Keller: But we will by the end of the year. And oh by the way, we don’t have ownership, which we will have that. So imagine an app, just as an example, [00:27:00] just imagine an app for the consumer that in real time, the second they use it, it begins using artificial intelligence to, just like Netflix or anything else, to personalize the experience in real time.
Brad Inman: Yeah.
Gary Keller: Imagine that it says, at a closing table you say, “Brad now that we’ve, not that you’ve bought a home, would you like to refinance if you could save money?” Yes. Okay, so I’m just gonna click yes. And you don’t have to do anything. [00:27:30] By the way if rates change and you can save money you’re gonna get an alert and it’s gonna say, “Would you like to refinance?” Now because we own a mortgage company, and we don’t charge origination fees, or closing costs, the mortgage industry hates me. Too bad. Okay. We don’t charge any of that. We don’t charge you any of that, it’s free. Just click it, and we’ll refinance your home. That’s what’s coming.
Brad Inman: At what point do you-
Gary Keller: And by the way that’s the battle.
Brad Inman: Before you go-
Gary Keller: The battle is not over search.
Brad Inman: Yeah.
Gary Keller: That’s gonna be a commodity.
Brad Inman: Here we got a question. At what [00:28:00] point do you care about the consumer experience versus the agent experience?
Gary Keller: Well-
Brad Inman: Or do you leave that to the agent?
Gary Keller: Well, no I care about the agent. I care about the agent’s consumer experience.
Brad Inman: And you feel like your technology enabling the agent to create a better consumer experience, or do you actually?
Gary Keller: Yeah, that’s the whole point.
Brad Inman: Are you ever gonna go direct to the consumer?
Gary Keller: Well here’s the, I think about it- No, why would I do that? No, I don’t, I don’t have buyers or sellers. No. Think, if you think about it this way, just think about it this way … the consumers’ the agents, but if the whole is moving towards the phone being the remote control of their life, right. Then the agent’s gonna have to have that tool. If the agent doesn’t have that tool to offer an end to end consumer experience how are they gonna service-
Brad Inman: So you’re obsessed by the agent getting the tools to serve the consumer. That’s really your vision.
Gary Keller: Well, let me ask you a question. How long after you wake up in the morning do you go to your phone?
Brad Inman: [00:29:00] Really quick unfortunately.
Gary Keller: Aren’t-
Brad Inman: I wish I didn’t.
Gary Keller: No, we all do.
Brad Inman: Yeah.
Gary Keller: No, we all do. So it’s a remote control.
Brad Inman: Kinda sick isn’t it?
Gary Keller: Um.
Brad Inman: Let me ask you a question.
Gary Keller: Yeah, but it- Where we are.
Brad Inman: Does EXP scare you? Does anyone scare you Gary?
Gary Keller: No.
Brad Inman: Yeah.
Gary Keller: No, because. No, they don’t.
Brad Inman: That was the wrong way to phrase the question.
Gary Keller: No, think of- No, think about this. When I started Keller Williams I built an innovation engine. So here’s a good example. You bring up EXP. Great example.
Brad Inman: By the way Glen speaks so highly of you. He thinks you’re a genius.
Gary Keller: Love [00:29:30] it. Great. Good for him. I appreciate it. And that, and I don’t care right. So think about it this way, when we created the profit share program this is what everyone missed. We created a leadership council, we assigned the decision making of the firm to that council. So we profit share today. If our agents want to change that to something else they can.
Brad Inman: Right.
Gary Keller: They can vote and change it. Here’s an interesting tidbit of information.
Brad Inman: So they come together on a regular [00:30:00] basis?
Gary Keller: So when we first- When we first started sharing money, we didn’t profit share. We actually shared the money, off the top. You sell a house, we wrote a check. That has problems.
Brad Inman: That formula?
Gary Keller: Three years into doing that it started showing real problems. And so, we ultimately voted and changed it to profit sharing.
Brad Inman: So you’re saying that’s what EXP does now, and that’s gonna, they’re gonna run into problems.
Gary Keller: What I’m saying is they’re, same with [inaudible 00:30:28]. Same with all the other [00:30:30] copycats.
Brad Inman: Yeah.
Gary Keller: That the, at the end of the day they’re gonna, they think they’ve reinvented something that’s broken. But here’s the interesting thing-
Brad Inman: Remember that’s flattery when people copy you.
Gary Keller: I, listen I have no problem with that. And when people disagree with me it just means that I’m ahead.
Brad Inman: Yeah.
Gary Keller: I don’t worry about that. I honestly, I don’t worry about that.
Brad Inman: What about that agent count at EXP, that’s gotta, you guys have been exceeding their, ringing your hands a little bit?
Gary Keller: Why are we talking about them?
Brad Inman: Well they’re just part of the scene, and we got a question from the audience.
Gary Keller: Not really. Well not really. I mean at the [00:31:00] end of the- No, no. It, no we’re captains of our own-
Brad Inman: I don’t want to obsess on it. Let’s move on.
Gary Keller: Okay.
Brad Inman: Let me ask you this, leadership you are generally, you are known as a leader in the industry. How has, think about in your 30 years, has the role of the leader changed? Like is, how’s leadership changed from say 30 years exactly?
Gary Keller: Well I think the industry’s changed. And that is, is that today you can say that before technology, and the after technology era. Prior to technology becoming [00:31:30] an absolute imperative for our industry, training, coaching, consulting, right that was the value proposition that we provided real estate agents.
Brad Inman: And that’s how you make your money right?
Gary Keller: Well we became the number one training company in the world. We built the number one coaching company inside the real estate industry. Dude, we-
Brad Inman: Right.
Gary Keller: We, okay we did that. Here’s the problem is, is that that used to be 100% of the conversation. And we woke up about three years ago and went, ” [00:32:00] We’re not gonna stop doing that, that’s no longer what will protect our people.” Technology, and only that technology, and putting technology that works in their hands, is the only thing that we’re focused on.
Brad Inman: It doesn’t, it, but that doesn’t mean the agents don’t still need it. But you’ll be giving it to them at different way? Like I presume you’re training is going more AI, and using technology, but not one on one.
Gary Keller: Yeah.
Brad Inman: Correct?
Gary Keller: Yeah that’s right. Yeah, that’s exactly right.
Brad Inman: Go back. Let me go back to [inaudible 00:32:27] theory. She said, she cleared to Wall Street and she said [00:32:30] the digital transaction for part of the deals-
Gary Keller: By the way one comment, and we won’t talk about this again about EXP-
Brad Inman: No, that’s all right.
Gary Keller: What I found fascinating-
Brad Inman: Remember, I didn’t bring it back there.
Gary Keller: No, no. No they did. But that’s okay. No, I just wanna point out one thing. And that is, I went back and looked, and there’s a group of leaders there that used to be Keller Williams. I went back and looked, and we paid those leaders over a million dollars last year. So I was wondering publicly since they think we’re broken if they would just renounce that money.
Brad Inman: There you go. By the way in fairness, Glenn will be on the stage to explain his business model.
Gary Keller: Cool.
Brad Inman: Let’s go back to [inaudible 00:33:04], ’cause I’m curious if- And I got that it’s a different vision, a different way of looking at it. But she says, digital transaction for part of the deals, meaning much like Etrade, the middle would be Charles Schwabb, people and agents, but an agent with a different role. And the third will be more relationship driven. She’s kind of saying five years out you can put Red Fin, you put Purple Bricks in the middle, you can put at the low end, we don’t have a maybe instant [00:33:30] offer. But you, does that sound bullshit? Is that gonna happen?
Gary Keller: Sure it is. Here, the- I want, again I want you to understand something.
Brad Inman: I kinda like when you’re up there now. I kinda- It took me awhile to get comfortable with it. As you can all tell.
Gary Keller: Here’s my, here’s the point I’m trying to make. That right there.
Brad Inman: Yeah.
Gary Keller: The ability to innovate in real time.
Brad Inman: Yeah.
Gary Keller: That’s, what changes everything.
Brad Inman: Yeah.
Gary Keller: You have the ability to build a platform that talks to each other, where everything [00:34:00] is integrated is everything. The problem in our industry today is, none of the companies that you would put on that side over there, and we can go from Reaology. I mean when Berkshire Hathaway calls us up and wants to rent our cloud service, dude that’s a problem.
Brad Inman: Did you just pronounce reaology that, for that re- How do you- Go ahead.
Gary Keller: Yeah realology. Yeah, whatever. I called-
Brad Inman: That was a cheap shot.
Gary Keller: I called you Bob once.
Brad Inman: Yeah I know. You called me a lot of things in March. I was in Australia so I didn’t hear it, but-
Gary Keller: That was good.
Brad Inman: People were back, [00:34:30] really texting me like crazy. I said, “Oh don’t worry about it. Gary’s-”
Gary Keller: You know why I do that is because-
Brad Inman: It’s okay you do it.
Gary Keller: It’s because the, a lot of the articles you produce are one sided. They don’t tell the other story right. Yeah, I got pissed because you put my name in an article in the header, and no one asked me for my opinion.
Brad Inman: Well that’s ’cause we get a lotta reader when we put your name there.
Gary Keller: Okay.
Brad Inman: I-
Gary Keller: There’s always two sides to the story.
Brad Inman: Yes.
Gary Keller: And if you’re not gonna give me equal time in the article then I have no choice, but to stand up and, and attack that.
Brad Inman: Right.
Gary Keller: You leave me no choice. If you’ll call [00:35:00] me every time you mention me and let me talk-
Brad Inman: Yeah.
Gary Keller: Then I’ll be nicer.
Brad Inman: Well we like, you know, people love to read about you and we try to cover you as fairly as we can. Our journalists wake every morning trying to do that, but-
Gary Keller: They do a great job.
Brad Inman: We make mistakes yeah. Let me go back to leadership. How is running a real estate company today different than it was, or is it actually the same?
Gary Keller: It’s all about technology.
Brad Inman: Yeah. ‘Cause you’ve always been kind of a facilitator, educator, which is the new management style, more collaborator. Is that true with your-
Gary Keller: I’ve always been a collaborator.
Brad Inman: Yeah.
Gary Keller: Yeah.
Brad Inman: And with your best agents, I always [00:35:30] love the [inaudible 00:35:31] and Sue Adlers. These people I admire are part of your brain trust, and they seem to me to be real good people.
Gary Keller: They’re great people by the way. And I spend probably 20 to 30 hours a week working with our top people. That’s what I do for a living. That’s why I know.
Brad Inman: So I’ll make a confession. I was out of the industry for many years in other industries doing things. I came back. And the first thing I had heard was Keller Williams is on fire. [00:36:00] And I had the impressions that a lot of people had, cold, Texans, Christian, all these tag words for Gary Keller and Keller Williams. And I was inherently suspicious as a journalist. And I went down and I wanted to understand the phenomenon. And the one thing that really struck me when you invited me to I think family reunion, and one of those, was the community you created. And it’s something we’re very proud of. And we have a lotta overlap. There are people here that love you, and hopefully some folks from your community that respect us. And [00:36:30] I think we’ve all learned that building community in real estate is very powerful.
Gary Keller: It is.
Brad Inman: We don’t agree on everything, but I congratulate on that.
Gary Keller: Well-
Brad Inman: And I also truly believe that you see the future better than a lot of us, and I really appreciate you being here.
Gary Keller: Well thanks.
Brad Inman: And I really do.
Gary Keller: What do you wanna know?
Brad Inman: My last-
Gary Keller: What are you dying to know? What do you wanna know?
Brad Inman: Well, tell these people one thing that’s gonna help them- We’re [00:37:00] saying there’s a, you, you just said it.
Gary Keller: Go for it.
Brad Inman: Change is upon us. What do they need to do?
Gary Keller: When I wrote the book the Millionaire Real Estate Agent I said it very crystal clear. And that is your database is your business. Your personal relationships with your database is your front line offense and defense against anything else that can happen. That’s it. Lead generate. Touch your people right. Build relationship with your database. And business hasn’t changed.
Brad Inman: So the principles are the same, but the difference now is the database. [00:37:30] But that always the case I guess right.
Gary Keller: Yeah.
Brad Inman: Keep in touch with your customers.
Gary Keller: Yeah.
Brad Inman: I mean you said that over and over.
Gary Keller: Well, the truth of the matter is, is that the entire real estate experience is gonna come online. That’s all there is to it. Why did Zillow want our data that they can’t use, and they have to be audited twice a year to not use it? Is because they wanna make their ABM better. Now is that good for us? Yes or no? Okay then. [00:38:00] Okay then. The answer’s no. It’s not. It actually isn’t good for us as an industry. Yeah.
Brad Inman: Great. Thank you for coming all the way up here.
Gary Keller: You’re welcome.
Brad Inman: You’re the best.
Gary Keller: You bet. Thank you.
