The Real Estate Dish: 15 Minutes with Jack Miller, President and CTO of T3 Sixty
Join QuantumDigital’s EVP and CMO Eric Cosway as he gets the latest dish on real estate technology with Jack Miller, President and CTO of T3 Sixty—a team of management consultants who facilitate solutions for real estate brokers, vendors and associations. Jack previously served as the CTO of a real estate brokerage that was recognized as Inman’s Innovator of the Year. He also led a ten-person team with Keller Williams Realty internationally, and developed an enterprise system that supported the growth of the franchise from 10,000 agents to 60,000 agents. Before that, Jack was a franchise owner, startup investor, and a computer engineer prior to getting into real estate.
Eric: Jack, welcome to the podcast.
Jack: Thanks, Eric, for having me on today. I really appreciate it.
Eric: Can you give us a brief overview of your background, and maybe a bit about your current role as President and CTO of T3 Sixty?
Jack: I started in the industry in 2001, and my background is actually technology. I’m a computer engineer by background. And I went to work for Keller Williams Realty International at their corporate headquarters. I’d been in technology, and in startup. I had done a lot of entrepreneurial work in the ‘90s, and I joined Keller Williams. It was really kind of a regional startup real estate company. It wasn't the national giant it is today. And I really learned real estate while I was at corporate at that company. That’s how I entered the industry. I’ve been in the industry for quite a while. I’ve worked for them, I’ve run a consultancy to help brokers utilize technology and marketing—I did that for several years. I’ve been a franchise owner. I’ve owned part of six franchises in the Minnesota market, and ran an independent brokerage with some partners. And then most recently, about five years ago, I teamed up with Stefan Swanepoel in growing his organization to build a management consulting and research firm of significant size for the real estate industry. That’s how I ended up where I am today.
Eric: Let’s go back to your time at Keller Williams. If you look at the technology at the time, and where you took it, from growing the franchise group, What were the top two or three challenges that still stick today that you remember “Those were tough challenges, and we got through those”?
Jack: 2001 was pretty early, in terms of the Internet and real estate. We had just enacted the IDX standards, so there was a lot to do there. Many of the tools that we have today just didn’t exist. The RESO standards were just a twinkle in somebody’s eye at that point. MLS data was a huge challenge. And the concept of providing technology to agents was fairly new to the industry, and that a franchisor was a concept we were attempting to use competitively. We really had to carve our own forks. We had to make everything. There was not a robust vendor community, and there weren’t a lot of tools, so we ended up building a lot of things ourselves. We built everything. That franchise, when I started there, was a little under 10,000 agents and 120 stores. We built the intranet, we built agent websites, we built a national website, we built an online education platform, an e-commerce platform... very sophisticated reporting and data capabilities to track everybody in the system and the franchises that grew. But, we had to build it all. It was a lot of work. It was good work. It was a great way to learn what the industry needed and to set a direction with who has eventually become a big national, and now international, player.
Eric: As you look back at your career—and, again, I see you as a very strong technologist—how did that roll into franchise owner? Was that an easy transition for you? Tell me about that.
Jack: I’ve been an entrepreneur. I come from a technology background, but like a lot of people—you go to school, you think you’re supposed to do one thing, and you get the education, and you go out and do the job for a while, and you say, “Well, I’m glad I have that background, but this isn’t the job for me.” Even though I went through… you know, I have a computer engineering degree, and went through that program at the University of Texas. I’m very proud of that, it was good for me to do it, and great background… you learn some strong skills as an engineer. Incidentally, Stefan Swanepoel is also an engineer, so we get along quite well in the work we do. We’ve brought on several other people with engineering backgrounds. So, you learn a practical way of thinking. But, I’ve really thought of myself as an entrepreneur for most of my career. And, so the franchise owner piece was… I was with the national company, I was at corporate, and I saw what a great opportunity there was—they were growing, they were opening new stores—and, like any entrepreneur, you look for opportunities. And I said, “This looks like a great opportunity.” I found some partners who were planning on opening franchises in Minnesota, and partnered up with them, invested some money and some time. We opened a store, then we opened several more. And we ended up acquiring six stores in the Twin Cities area. It was really invigorating, and fun, and challenging. Starting and running small businesses and franchises is exciting. It a lot of work. It takes a lot of sweat. But it’s great when you get things up and running and you can be proud of it.
Eric: You and I have known each other for a number of years. But one thing I don’t know is how did you get into real estate in the first place?
Jack: Most people that end up in the real estate industry, they go “Well, it wasn’t my plan to be here. This was not on my roadmap.” As a matter of fact, I’m really confident that, had you told me a year before I ended up in the real estate industry, that I was going to end up in real estate, I would have told you you were crazy. So, it really was an opportunity. I had been with a technology company based here in Austin—they’d had a billion dollar IPO, I had some stock, I sold it, paid off student loans, bought a house, got married, did all that sort of stuff—and then, invested in another startup and ran a startup with some partners for a year and a half—again, the entrepreneur in me, and being an opportunist. Well, the dot-com crash came, and we crashed just like a lot of other startups did at that time. A lot of valuable learnings in that. And I came out of that looking for… I knew what I wanted. I wanted to work with a company that was in a traditional industry, that was sales-oriented, where technology had an opportunity to make a big difference. That was my criteria. And I wanted a company that was changing their industry or doing something really interesting or dramatic. I like high-growth. I like startup. I like that kind of environment. So, I was looking for something that fit this criteria. And a friend of mine, who was serving as a consultant—he was a virtual chief technology officer for them, or an interim chief technology officer for Keller (Williams)—asked me to apply for the role. He said, “I think, based on what you’re looking for, I think this company has what you’re looking for.”
Eric: Sounds like a fit. Let’s move into your consulting role with Swanepoel’s group. Your firm just released the 2018 Trends Report. What two or three major shifts, or trends, do you concern yourself with, think about, realize are right in front of us… are there any of those that just really stick?
Jack: I definitely want to talk about those. I want to position the Trends Report appropriately. It’s first important to understand what we consider a trend. Because a lot of people throw… “I know this is a trend.” So, what we do is we look at what’s happening in the industry that we believe that’s a significant change, that we believe belongs on the agenda of executives in the industry, where it needs to be talked about. Every year, we have this conversation. We come with a big list, and we say “Are these trends?” And there’s all kinds of stuff. We like to say our clients are the brokers and the franchises, and all the players. They make the news. They’re the ones that make all the big moves. Inman, and RIS Media, and the reporting organizations, they report on the big news. And what we do , is we analyze what happened to understand why it’s happening, and to categorize it, and determine whether or not it’s a trend, or is it a fad, or is it a whatever. The trends are not a light exercise for us. We look at what do we see that’s having a business impact, that’s a significant change to the industry today, and what do we think is going to come in the next two to three years. First of all, that’s how we evaluate trends. When we talk about trends, it’s not like “Hey, these are ten or eleven cool things that we think are happening.” It’s like, no, these… if you’re an executive, this belongs on your executive planning schedule.
Eric: It has a shorter term horizon, not too far reaching, but real, and with significant impacts in front of these executives. Okay, that makes sense.
Jack: Some of the trends we’ve looked at, in this most recent trend report, and even last year and the year before, which are now really coming into full bloom, we’re seeing them really impact. Two years, we wrote about the Internet lead generation and conversion game, and how we’re seeing that—and we studied companies that were doing it really well—we made a call at that time. We said, “You know, this experiment of handing leads to agents with little accountability… the experiment has run its course. And the answer is, it doesn’t work.” And we believe that companies that are going to do well are going to do what several of the early players in this space have done, which is use a call center, or dedicated staff for converting leads. We wrote about that two years ago. And that’s really come into fruition right now. We’ve seen a number of companies, one of them here in Austin, Opcity, that's really built that out. So, that a good example of a trend that we, two years ago, said we think that this industry is going to move in that direction—we’re seeing that. We’re seeing more companies do that. Last year, we wrote about the trend towards these flat-fee models. And these are models where you pay a per-transaction fee as an agent—you may pay a monthly fee to affiliate with a brokerage, and a fee per transaction. That’s one of the fastest growing parts of the industry right now. And, in the report we wrote last year, we said that one of those larger companies—whether it’s HomeSmart or Realty ONE Group—is going to grow substantially, and we believe one of those companies is going to get to the benchmark of tens and tens and tens of thousands of agents. It’s going to be substantial. And that’s playing out. After we wrote that trends report, HomeSmart acquired a significant set of companies, and has grown substantially. And the two biggest companies—Realty ONE Group and HomeSmart—between the two of them, are well over 20,000 agents today, and they’re growing fast. That’s a trend that we see still unfolding. This year’s report, the big theme for us—and it shows up in several different ways—is about all the money coming into the industry.
Eric: Yeah, I was going to ask you about that. Because that, to me, is fascinating. All those venture capitalists coming in. That’s really a strategic shift for the entire industry, and real estate is late to the game. But, it seems pretty exciting that all this new money is coming in.
Jack: To put it in perspective, there’s been about two and a half billion dollars put into the residential real estate industry. I’m not talking commercial. I’m not talking mortgage. I’m talking residential real estate industry.
Eric: That is significant.
Jack: Yeah, it’s a lot. And that’s in the last 18 months. The last time we had that level of capital coming into the industry was back in the nineties. We ended up with HomeServices of America and NRT, which are the two largest brokerage organizations. They’re the titans in the industry. So, last time this much money came in, we ended up with number one and number two. That’s how influential that amount of capital can be. Now, we’re not saying that means we’re going to create a new number one, or a new number two, or a new number three. We don’t know what’s going to happen. What we do know is, it’s significant.
Eric: Yeah, and it does set the stage for a tectonic shift in the industry. Would you agree with that?
Jack: Yeah, absolutely. The broker community has been forced into reacting to some of this, where… you know, if a Compass—which is one of these companies that has raised a lot of money—comes into your market, they’re likely going to have an impact on your business, because they’re going to bring over some of the top people. And, if you’re in the market with an OpenDoor, or a Knock, or one of these companies that’s making offers directly to consumers to purchase a property, they’re going to make a difference. If you’re in a market where one of these flat-fee competitors is coming in, that’s been funded, it’s going to impact you. It’s having an impact from different sides on the broker community. And we think that’s going to continue, because that’s a lot of capital in play.
Eric: From your vantage point, being with Swanepoel, do you see independent brokers concerned about that, trying to get ahead of that now? Or are they kind of waiting this out a little bit?
Jack: In my mind right now, there’s two kinds of brokers in the world. I’m going to be very simplistic, and I know that it’s a generalization. You have a broker that has had basically the same value proposition for a long period of time, where they’ve maybe not made substantial investments in changing or improving their value proposition. Then you have brokers that have already started that, or have been in that process of significantly improving their value proposition, and doing things like improving their technology, improving their digital and online marketing, providing more services for agents. Brokers are kind of falling into one camp or the other. From our consulting work, it’s across all lines. It isn’t just independents. There are franchisees that are the same way. You can have a very progressive, innovative franchisee that’s investing and growing their company. You can have a franchisee that’s had basically the same offer for the last 20 years and hasn’t really kept up with the times. It doesn’t appear to be related to your affiliation. It’s more about the orientation of the management and also the demographics. Demographics play a huge role here. If you’ve got a broker/owner nearing retirement, they’ve probably not been making those kind of investments. Some of them have. I don’t want to paint everybody with the same brush, but it’s not unusual to find that if you’re a broker in your retirement, your shop may need an investment in order to keep up.
Eric: That’s true. We’re coming to a close here. I want to keep you for a couple more minutes and that’s it. What are some of your personal passions or hobbies you do that we wouldn’t know about?
Jack: You know, I’m real involved in scouting. I’ve been a Cub Master of a pack of about 35 boys for the last four years. And that’s been great. My sons are both about to matriculate over into Boy Scouts, so I’ll be able to hang up my Cub Master spurs fairly soon. And I’m glad for that. It’s a lot of work, but it’s very rewarding. I came from a family that was divorced, and my father was not very active, and so this has been my way of kind of paying it forward and getting involved in the lives of young boys who are going to turn into men that will hopefully lead this country. That’s something not everybody knows about me.
Eric: From all that experience, can you actually light a fire without a match?
Jack: Well, we’re working on that! Fortunately, they don’t have to do that to get out of Cub Scouts. They’ve got to do that in Boy Scouts. Cub Scouts, they don’t have to. It would be challenging for most adults to do it, frankly.
Eric: Yeah, you know for all the fires I have in my backyard, I use a blowtorch. So, I’d probably be breaking that Boy Scout rule.
Jack: You know, sometimes the shortcut is not a bad way to go.
Eric: Hey, Jack, this has been fun. Thank you for your time.
Jack: You bet! Thank you.
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