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Transcript: Proptech Group – Joe Hanna: Agent ecosystems and IPO rodeos

Kylie Davis:

Welcome to the Proptech Podcast. It's Kylie Davis here, and I'm delighted to be your host as we explore the brave new world where technology and real estate collide. It's so great to have you here and to share stories of innovation and opportunity across real estate, property and building services. And the aim of each episode is to introduce listeners to a Proptech innovator who is pushing the boundaries of what's possible across how we design, build, buy, sell, rent, and invest in property and all of the associated behaviour and activities around that. Now none of this would be possible without our sponsors. So a big shout out to the Direct Connect team, making, moving easy. Dynamic Methods, the innovators behind the Forms Live and Realworks Forms and the Proptech Association of Australia. Thank you for your support of the podcast. My guest this week is Joe Hanna CEO of the Proptech group.


Kylie Davis:

Now Joe started his career as a software developer before working at Fairfax in the days when classifieds and their rivers of gold were still a thing. He successfully made the transition across the digital business and over the past decade or so has been working with Simon Baker on Proptech startups and growing them into serious players. Most recently launching the Proptech group, the fourth business, he has taken to IPO. And in this interview, Joe and I discuss the changing dynamics of Proptech for real estate agencies. The need to create your own lead generation and marketing ecosystem. And he generously shares his experiences on what it's really like to list a Proptech on the Stock Exchange. So here to tell us all about it, Joe Hanna, welcome to the Proptech podcast.


Joe Hanna:

Thank you, Kylie. Thanks for having me.


Kylie Davis:

It's great to have you here. Now, Joe, we had Simon Baker on the show, a coup… A few episodes ago and he was telling us about being a founding father of Proptech. But what I'd like to get into in this interview is to find out more about the Proptech Group specifically. So what is the Proptech Group's elevator pitch?


Joe Hanna:

Okay, well, in a nutshell, the Proptech Group provides market leading software that helps real estate agencies run their back office. So it's tools that they depend upon all day, every day. And by that, I mean, we're not looking to displace or disrupt agencies, really to embrace the role of an agent, to make them more efficient through streamlining, optimising, wherever possible, automating the workflows.


Kylie Davis:

Awesome, man done. So look, there's lots of different products now that you guys have got that are part of the Proptech Group. What, tell us what they are and what each… What problem each of them solves?


Joe Hanna:

Sure. So look, I guess at the core of our software solutions are the core systems that agencies depend upon all day, every day. And by that, I mean the sales CRM or property management software solutions. And as your listeners will know, they're the systems that agents rely upon, the source of truth for any real estate agency. So that's where we launched when we first listed the business through our VaultRE product, which we acquired MyDesktop from Domain and they acquired from the founders of Vault, back in 2005. And again, in 2007. So our core CRM is really the basis of where our technology stems from. And what we do is we expand out of that into some key areas, namely marketing. So we have our website capabilities through Website Blue. Eagle as well is our other CRM provider that also has inbuilt website capabilities.


Joe Hanna:

Our marketing automation. So things like [Designwood 00:03:33] Pro, which is just about to be released, enabling real estate agents to have life proposals, track how [Bendalls 00:03:40] are. Are consuming their proposals and is quickly becoming a marketing automation and increasing that. We've got additional tools around data and what we call efficiency add on tools. So think of those as what you can probably refer to as a plugin, if you like, to a CRM, an additional piece of functionality that makes the agent more efficient. So in that area, we have Rentfind Inspects, our inspection tool, and a couple of other tools that we're bringing to market over the next couple of weeks, either that we're building or through partnership. And then we also have a B2C tool. So we're primarily a B2B business, but have a B2C tool, which is called Real Estate Investor, which enables residential retail investors to find investment grade properties in a way that's much more efficient than going to a portal an [RAA 00:04:27] or a domain for instance.


Joe Hanna:

Increasingly we add additional products, almost monthly now. And when we… The differentiation for us is that a product is a standalone product that you can buy from Proptech group, as opposed to a module or a feature. Within each of our core CRMs there's obviously modules, a marketing module, a data module, the commercial module for commercial real estate agents. But standalone features we've got about… Sorry, products rather. We've got about five that we can sell separately at the moment. Our last one, which we're in the process of taking to market now is our franchise management system. So think of it as an agency reporting system, which enables franchise groups to get a bird's-eye view of a performance, their entire network. As well as principles to get a bird'-eye view of their performance to their individual agency or multioffice for those that don't work in an office.


Kylie Davis:

Okay, awesome. So if I am a Proptech Group customer, do I need to buy all of these things and have them plugged together or can I mix and match?


Joe Hanna:

You can certainly mix and match. I mean, we know that particularly CRMs, are quite a difficult, to move on. I know for us, we have an average tenure of eight and a half years, and we find that in industry, I think the standard is about six and a half years. And that makes sense if you think about how ingrained into the workflows of a day to day agent, the CRM is. It's a source of truth data. So with many of our products, we don't expect our customers to have them all. Obviously we'd love them to, but I guess what we're trying to build is an ecosystem of Proptechs that talk to each other and deeply integrate with each other to a centralised integrated platform. And that single solution to do all is really the basis of I guess, the fundamental driver behind Proptech group.


Kylie Davis:

Okay. Awesome. So what's your background, Joe? How did you become involved in this craziness that is Proptech?


Joe Hanna:

Well, unlike Simon, I'm not a forefather of Proptech. But I have that over, I drove over 20 years experience. Look, I started my life as a software engineer back in the early nineties, worked for Fairfax Media initially in the print side of the business in total for about eight and a half years, and then switched over after about three years to the digital side of the business. And what was interesting about that journey was I was senior enough to be privy to conversations, but not senior enough to have to make decisions of the haemorrhaging of all the transitions.


Kylie Davis:

I had a long period of Fairfax so I know exactly what you mean, probably about the same time.


Joe Hanna:

And I guess what we saw then was just how portals had really streamlined the consumer journey of looking for classifieds in general. So I spent a fair bit of time at Mycareer.com that I knew, running their product and technology, and then left in 2008 to pursue startups. That's when I actually joined forces with Simon Baker and since then, he and I have been building, investing, launching, growing. IPOing a whole bunch of Proptechs all around the world. Not all of them, in the portal space, but certainly in the early period, portals were where most of the money was being spent in Proptech. So we launched a business called Mature, which is essentially, think of it as Indeed or Trivago if you like, for real estate. Enabling people, provide a single interface for them to see all properties that were on the market.


Joe Hanna:

It didn't make a lot of sense in Australia and New Zealand, because you have only got a couple of portals that you need to go to in order to see all these things, but certainly in other parts of the world, we're in 54 countries around the world, you do need to go to 5, 6, 7, sometimes 10 plus portals to find every property for sale or property for listing. So my background very much is a product and tech guy and then running, founding and running businesses at scale, which is certainly been fun. Proptech Group, as you may or may not know, started in, officially started in 2020 when we RTO'd the, MyDesktop Vault into Real Estate Investor as a public listed company.


Kylie Davis:

So look, I'd love to hear more about how that went. So what was it like to IPO? Like how hard was it? What were the biggest challenges and what were the lessons that you learned?


Joe Hanna:

Oh, gee, how much time do you have. In reality, the fourth IPO on the ASX that I've been involved with? So…


Kylie Davis:

Okay. Oh, you're a veteran. No?


Joe Hanna:

I wouldn't say a veteran. I think I'm battle-scarred shall we say. In reality, it's… This time around I learned from the mistakes of the past, I guess the simplest way for me to articulate it is when you're in private land. And with many of my previous startups, I've raised money from VCs, raised money from family and friends, as you do, when you get started. Raised money from private equity firms. And it's a very different experience when you go public. One is there's a heavy compliance component to it. So there's a hell of a lot of what we call verification, making sure that everything you put out to the market is verified and correct. There's a lot of audit, and risk and governance that's really required, but at the same time, it enables you to actually get exposure to a much broader group of investors. So for us, the reason why we wanted to list Proptech Group is, if you think about, particularly on the ASX, the number of Proptechs that were there, particularly when we listed that were there. There were very few and particularly very few in the small space.


Joe Hanna:

So you've got the really big top end of town, the REAs, the domains of the world, but to give exposure to mum and dad investors, small retail investors, and large institutions for emerging businesses in PropTech. Now, there wasn't a lot there. So the experience, is an interesting one. It's a minimum six month experience if you really push hard, but typically it takes nine plus months. And the other key challenge with it is, when you're in private land it's a lot easier to argue your valuation, right? You can say, well, look at the other Proptechs that raised money at 10, 20, 30 times revenue. When you're in the public markets, your valuation is really determined by the market. It removes that discussion, but at the same time we've raised now $22 million in the last year since listing.


Joe Hanna:

And that process, once you're in the rhythm is actually quite streamlined as a public listed company. I certainly wouldn't recommend it for businesses that are early, I think. And I certainly, what one cautionary tale I'll give to other Proptechs is. It's not an exit. It's really a way to continue to accelerate your growth. But for those that are thinking, it's a way to get out. It certainly isn't. Particularly as a Founder, as a, CEO an MD, there is an expectation that you're going to be here to grow the business for a period of time. At least three or four years. And unless you're prepared to do that it's not the right time to IPO.


Kylie Davis:

You've got the whole market looking at you haven't you? So you don't want to be running away from that because that's going to really affect the valuation?


Joe Hanna:

Exactly. But there are so many upsides to it as well.


Kylie Davis:

So what, tell me about some of the biggest challenges of the IPO? What things did you find the most personally challenging?


Joe Hanna:

Oh, look, I think the biggest challenge and again, for me, this was the fourth IPO. So I've gotten over the challenges I had the first time around, which is really putting yourself out there, speaking to investors that only have 20 minutes for you to wrap. For them to wrap their head around your story. So the biggest challenge not dissimilar to startup land, is you've got to be really clear and articulate with your audience who may not be, well, actually are not Proptech experts. Don't understand the industry, don't understand what we're trying to do. So. Probably the biggest challenge I would say, and still today is just how you clearly articulate your strategy and your message and the market opportunity, in a way that doesn't get too detailed and is really easy to understand. The other key challenge I think with being listed is everything's in a public domain.


Joe Hanna:

So, when you're working on some pretty cool secret score projects itself, there's only limited amount that you want to share with the market because you're sharing it with your competitors and everybody else as well. So it's really finding that balance between talking about things that are real and practical and in front of you. And not trying to talk about what if the world was like this. And we released these product. We did that. Find that balance between showing your investors that there's a journey, we're at the beginning of it, it's going to be really great. There's a real need for this today. And this is what it is. And giving them enough comfort that A. You know what you're doing, you've got the right team, you've got the right board. And that you've got a clear articulation of where you want to get to. But the end summary, I think the challenge is, really getting that short, sharp articulation of your strategy and your value proposition.


Kylie Davis:

Awesome. So I have a question because compliance is always one of those things that seems both expensive and boring, but if you're in a public company, you absolutely have to do it. So I'm not questioning the need for it. But what proportion of your cost of, tied up in that compliance side of it? Because I think that's often something that shocks businesses when they go from being a little startup they're based around a couple of founders and then suddenly you're getting bigger and you've got shareholders on board. So the compliance side starts to get bigger and there needs to be resource put behind that, right?


Joe Hanna:

Oh, absolutely. Look, if you just take the listed compliance costs and I'm not talking people literally now the cost are being listed, the cost of audits. It ranges at a very, for a very small company at a very minimum, it's half a million dollars a year. But typically it's about a million dollars. For us it's between a million and a million 0.5 a year. Now think about where that gets spent. Obviously there's lawyers getting your CoSec involved. Insurances are really important as well to ensure that directors and shareholders are protected. But then there's also audits and governance and all those governance things.


Joe Hanna:

Look, I guess the upside to that is when we talk to our customers, there's an additional layer of security that they can bank on which is the fact that we take ESG really critically, of critical importance. Things like data breaches, ensuring your technology is secure, that your stacks are being pen tested every year. That your customer's data is actually secure, is a very important part for our business and something that we spend a lot of money on. And then just ensuring that being public listed means that there's full transparency as well, that you're backed by shareholders, you're backed by compliance and regulation that stops you from doing any funny buggers basically.


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Kylie Davis:

So Joe, what's your vision for the company or for the company now. How… You've got lots of different products and lots of different features and lots of different, and you've done lots of M&A's and things like that, or purchases and brought people in. How hard is it or easy is it to have all of those different businesses and products scaling at their own different rate and winning market adoption and share, but at the same time that are coming together. What's that vision look like?


Joe Hanna:

It's a really good question. And I guess I'll take it back a little bit and talk to, and I know you've met with Simon Baker recently. So. Simon and I were going to set up a Proptech Group Fund, a Proptech Fund, globally before we started Proptech Group. And the idea there is we saw internationally a lot of niche Proptechs that were not necessarily disrupting the market, but really adding some really nice features and capabilities to the industry, but in a very small way or in a very nichely focused way. What we found back then was gen… If you could pull all these things together and got the left hand to speak to the right, you could actually accelerate the adoption of innovation, accelerate the automation of some of the low value things that agents do. When you take that philosophy and apply it to Australia. One thing that always fascinated me and I will preface this by saying I was actually at Fairfax when we acquired MyDesktop and on the team that recommended to go and buy MyDesktop.


Kylie Davis:

Okay.


Joe Hanna:

And if you think about why back then it was, well, I actually should say, I asked Fairfax to invest in my startup and let me go and build the CRM. And they said, no, just go buy one that's on the market. But as a media business, trying to get some understanding of the unit economics and running a real estate agency. Getting access to the data and maybe being able to influence their marketing behaviour was really attractive to us. And what we've seen in multiple markets all around the world is that property portals love the concept of buying a CRM. Hey, what can we get access to all this data? Agents don't really like having a CRM that's owned by a portal because then they're worried about the data sharing, but the portals themselves, it's a fascinating business alone. When they buy them, they realise that they're hard businesses to run. They're very feature [inaudible 00:18:07] focus. They're not very expensive by comparison when you take a look at the value and inevitably they're very different businesses to run than high traffic B2C businesses.


Joe Hanna:

So inevitably they get left behind as the second cousin and ultimately die death by a thousand cuts. As we saw with MyDesktop here, but we've seen it with Zulu in the UK we've seen Zillow in the U.S. We've seen it pretty much every established market everywhere in the world. So I guess for us, when we looked at the opportunity to take an institutional approach to Proptech and really let's call it agent tech, for lack of a better term, it was really understanding that most of the investment in Proptech over the last 20 years, apart from maybe the last three or four, has really gone into the portals, to disrupt the newspapers. And I'll go out and leave and say that they're essentially the newspapers of today. And they're adding additional services, which in my view are starting to slowly approach on the role of an agent and what an agent does all day, every day, which is not exactly desirable position for us to have such dominant players, influencing what we do as agents, day to day.


Joe Hanna:

So what we really saw was an opportunity to take an institutional approach to the CRM as the core systems that agents use. And the idea behind that was, there are all these Proptechs that really extend on the features or functionality of a CRM.


Kylie Davis:

Yep.


Joe Hanna:

And the only way that they work is by deeply integrating or integrating in some way, shape or form with the CRM as the source of truth of data truth. So I guess our strategy was to say, well, how do we stop? There are 320, you'll know this better than I do, 320 Proptechs operating in Australia today, given, we have 9,900 agents, 12,200, if you add New Zealand. There are a lot of different Proptech providers adding all sorts of different solutions. And it's actually quite frustrating and difficult for an agent to understand what mix of technology works together and makes sense to adopt.


Joe Hanna:

So really for us, we saw this opportunity to start with the CRM at the core, acknowledge that if you're running a CRM in isolation, then your ability to really deeply integrate with another Proptech is limited by your op ability to charge for it, or your ability to get some type of earn off, of that third party, which in a small market like Australia is very difficult. So our philosophy was to say, well… How do we build a single platform where we don't necessarily have to own every Proptech that agents work in, but play nice with them in an ecosystem where acknowledging that the data is owned by the agent, the capabilities will be owned across various groups. But really if you can build an ecosystem where the left hand talks to the right, and I'll give you some practical examples of that in the moment, then you're really the champion of the agent and the champion of the industry, and actually making the process a lot more efficient.


Joe Hanna:

I guess, ultimately the driver is, if we can help our agents be more efficient and focus on what matters most, by nurturing human relationships with people, which ultimately is critical to the, to any real estate transaction, let alone a sale. Then you are essentially making it the process of buying, selling, and renting a property better for, a better experience for consumers. So it's whilst we are a B2B business, we kind of see ourselves as a B2B2C business by getting agents to interact with consumers in a much more pleasurable way than what we've otherwise been used to. I guess the challenge is, as a consumer, the real estate industry is still a bit fragmented. It's not as digital or digitised as every other industry that we're used to. So there is certainly room for improvement and there isn't massive gains or massive innovations in technology that will facilitate that.


Joe Hanna:

I will give you a very quick example and I'll stop babbling on, because…


Kylie Davis:

That's okay.


Joe Hanna:

As I said, for hours, but in reality, the fact that we've grown from our CRM to now CRM with website capabilities, to marketing, to data is essentially looking at all the key elements that an agent needs all day, every day and extending our capabilities to capture a better portion of that element or that feature. And websites a really obvious place to start, right? Because you don't want to keep relying as an agent, keep relying on buying leads from the portals, having the money to come into your CRM and then go back out the other end, to go back to the portals. So by having a website, it means you're able to retain them into your, in your digital ecosystem. Now that's all great if your website's talking to your CRM, but if it's not, it's kind of pointless, right?


Joe Hanna:

So you want to make sure that if someone receives an email, think if your enquiry, here's our website. If you want to have a look, maybe do a virtual tool, you can post on social here or follow us on social here and book an inspection through this self-service digital link. If all those features and functions, aren't talking to each other, then in essence, where agents are relying again on third parties to nurture relationships and nurture leads, in reality, given that we're at 41% market share by number of agents in Australia using at least one Proptech Group product, and actually 51% by number of real estate listings in the last 12 months sold.


Kylie Davis:

Congratulations.


Joe Hanna:

Thank you. It's been an interesting ride so far. I'd hazard a guess that every person looking for a property is probably one of our customers contact databases already. So the reality for us is how do we extract and unlock those existing vendors, those existing buyers through the relationships you already have and using the digital assets that you already have. Hopefully that answers your question. I went a bit off, off style a bit.


Kylie Davis:

No. No.


Joe Hanna:

But really in a nutshell, if I was to summarise it, the aim of Proptech Group is to really, to continue to be a champion of the industry by how enabling agents to rely on their own digital assets, to extract value from their existing relationships and streamline the process as best as we can.


Kylie Davis:

Awesome. So how… So, is the market buying that vision because, and look, and I saw Dave was kind enough to send through your results and it was great to see that you're revenues that doubled. You'd be performing really strongly on all of that, but I noticed recently that your market cap, you were about a hundred million back in Feb 2021 or something, but now you're down around 80 mill. And that seems to be one of the vagaries of being listed as a listed company. But what does that mean and what do you see is going on there?


Joe Hanna:

Oh, look I think it is one of the vagaries of being a listed company. And I think if you take that revenue, multiple, we're trading at some four times revenue multiple, which for a high stacks, high growth stacks business is very low. But I guess what it talks to, multiple things. One, as I mentioned, my fourth rodeo with this [crosstalk 00:25:05] and very keen on getting the right investors in. So whilst we have very low volumes of people selling our stock, and that's largely through the fact that we have very large institutions on our register that came in at, at pre IPO and listing and they're long term value holds. So they're just not telling, they believe in what we're doing. They're seeing the results and they're happy not to sell. We then got a bunch of small day traders and mum and dad investors that really move the needle up very low volume, but really what it talks to is opportunity for us to bring on new investors, to get people in at the right time.


Joe Hanna:

And now we're sitting at the base of what we believe will be continued growth. So the way to answer your question is… Look, I think that our customers certainly understand it. And we, this is public knowledge. We thank Ray White family for having an equity in our business, Raine & Horne have equity in our business, significant equity as does Harcourts. So our customers really get it. They understand what we're trying to do. And the fact that we've grown market share by 45% is testament to that.


Joe Hanna:

The market is understanding it, but also acknowledging that we came from pulling out of business out of domain, taking what was essentially a startup and throwing them together. The market just needs to know that we can actually continue to do deliver on that promise, but it's look, it's not uncommon for you to get a real sugar hit post listing. We listed a 30 million market cap and quickly grew to a hundred and are now sitting at around 80. Look, I expect we'll get back there in due course. The challenge with being enlisted business, probably one of the things I should have said to one of your early questions was don't look at the share price all day, every day, or else you do…


Kylie Davis:

It will drive you insane. So how big is the Proptech Group? How many staff have you got?


Joe Hanna:

So we've got over 125 people globally now. So we've got a, obviously got teams in WA with the [Volcos 00:27:05], at Melbourne is our corporate head office. And there's about 40 of us here with Eagle and group functions. Teams in Brisbane with our website Blue Business and the Vault business, teams in Christchurch and teams in the UK as well. But yeah, 125 going back a year ago, we were 52 so it's been rapid growth.


Kylie Davis:

That's very big. That's a lot of change. And so what's your view on… It's great to hear that so many big agency groups are backing you, but what's your view on real estate and how they're adapting to technology and how are they going today, compared to how they were sort of three, five years ago?


Joe Hanna:

Oh, look, I think we've seen an acceleration. Yeah. I think we've seen an acceleration of the adoption of technology. No doubt. And certainly over the last two years with COVID, we've seen a rapid acceleration of the adoption of technology and I'm sure, and I'm listening to your podcast here. You [inaudible 00:28:05] podcast here, who would've thought going back two years ago that we'd sell property site unseen or through virtual options and virtual tours. And really that's now the norm. And I guess what that's telling us is we were as an industry, sceptical and somewhat hesitant, to jump in to those, what was seen drastic moves, two years ago. But now that we know that consumers actually want them and they'll adopt them, so that's opened, I want to say open up a floodgates to a certain extent, say… Well, hang on if these types of innovations are very well received and what else could we do?


Joe Hanna:

So to answer your question more directly, our customers, I think, are really starting to wrap their heads around the benefit of technology and the fact that it's not a disruptor, it's an enabler. And that if you remove the mundane tasks and enable people to self-serve, it doesn't prevent you from having a meaningful conversation at the right time. It actually enhances your ability to having meaningful conversation at the right time, which is what we ultimately want. So in a buoyant market, for example, with the level of [inaudible 00:29:08] inquiry that comes through. Being able to just sift through technology, the tyre kickers or the shoppers versus those that are really interested, that again adds really valuable hours to an agents day. It means they can have meaningful conversations.


Joe Hanna:

If you're going to make three phone calls. These are three to make. Similarly for vendors. Being able to understand that people are starting to go to us for inspections. Because they're looking to move, which means they're potentially looking to sell. Also enables us unlock value that otherwise would be harder to unlock if you're constantly on the phone asking people. So I guess what we are finding as an industry is technology adoption is certainly growing, the challenge that I think we have, as I mentioned earlier, with 320 Proptechs, is really just wrapping your head around the mix or what do I use in what instance, when?


Joe Hanna:

We also need to remember that as agents, in real estate agents, are real estate agents. They're not technologists. So as technology becomes more prevalent, then the expectations for agents to be more tech savvy increases. And I guess that's why we exist, is to sift through all the crap and say, well, this is what, this is the mix that works, and this are the things you need to be mindful of. And this is where technology can add value when this is where it becomes a bit silly and really doesn't add any value.


Kylie Davis:

And just on that point, there's 320, which I'm assuming in that real estate agent and marketing CRM in the agent, if in sphere space, because what we know at the Proptech Association is that we've counted over 500 because when you start to add in property owner, big property, commercial ownership, apps, and technology happening in that space and especially around environment and building, and that number goes up to 600 and you might go… Well, I don't need to know about them because I'm not an agent, but there's so much noise. There's a lot of noise that you've got to detect the signal from. So.


Joe Hanna:

You're absolutely right. The 320 is just as it pertains to agents, there's well over 600 as you pointed out and the problem is that's growing daily.


Kylie Davis:

It sure is. Do you run a Proptech business or are you the Founder of a Proptech? Make sure you join the Proptech Association of Australia. It's Australia's new, not for profit association, made up of tech people who are passionate about the property industry and committed to improving experiences in how we buy, sell rent, manage, build, and finance property. Joining will give you access to events and networks across Australia and globally, to help you promote and grow your business. Go to Proptech Association.com.au and follow the prompts to join.


Kylie Davis:

So what's your advice to agents when they're thinking about what they… I need to, I mean, I get asked this all the time. What should I, what tech should I be using? Or what, how should I be assessing it?


Joe Hanna:

Well, look apart from the obvious, which is just use Proptech Group, because we'll [crosstalk 00:31:58]. In full seriousness, look I guess the key takeout, it's really important to try things. So don't be shy to try technology, but unless your left hand's talking to your right… So you've got all these different technology platforms and tools. If they're not integrated, if you're not, if you're having to cut and paste and double dip in order to get, to extract value, then are you really adding hours to your day rather than removing hours from your day? So what we like to do with Proptech Group is sometimes our agents will come to us say, look, I've got this cool tool that I've been using, but it doesn't quite integrate with Proptech Group. And this is how I use it. So speak to your vendor, speak to your current supplier around the tools that you use.


Joe Hanna:

Then noting that sometimes there is a cost to those vendors for integrating. But if you get to a point where you found a tool that isn't unlike anything else that you've used, that's out routing real value. Then more often than not your technology provider will get some type of integration. I guess, for us, what we are trying to do is, we integrate with everybody. But then we deeply integrate with only a select few. And that deep integration is around removing the barriers to adoption by removing the need for an agent to have to remember to do something.


Kylie Davis:

Right.


Joe Hanna:

I guess I answer your question again, more directly, is ensure that for agents I'd recommend trying everything, but ensure that you are getting value out of it so that you're not double handling information.


Kylie Davis:

Got it. So what do you think the next five years holds for real estate agents? Get your crystal ball out? What do you, what are the trends that you see are going to come through the pipe next?


Joe Hanna:

That's a really good question. And one we get asked a lot. One, not, I tend to not try to answer too much because it's so difficult. Look, I think there's a number of key themes. The first key theme is understanding that as consumers, the next wave of consumers expect digitization. That they expect to be con… To be able to self-serve where it makes sense to anytime, anywhere, two in the morning, three in the morning. So being able to use technology to remove the low value tasks of an agent. Back a few years ago, the concept of task automation was a thing. Now, and we're not the only CRM that talks about it, the full automation. I mean, what, why send a reminder to an agent to have to remember the phone, to make a phone call, if you can send an email to a consumer with a link, for, to enable them to self serve for things like the booking inspection or for them to check out some photos online.


Joe Hanna:

So I think the first theme is around personalization, digitization, and enabling people to self-serve where it makes sense. The next wave is around data and understanding that data provides signals of interest or propensity and all these types of things where AI gets thrown out a lot. In reality, I think it's more machine learning than, than artificial intelligence. Just being able to sort through the massive amounts of data to enable agents to be a lot more efficient. So for us, where that resonates and makes sense is again, back to this ecosystem world, if we know that someone's gone to say real estate.com or domain and clicked on a listing, they ended up in the CRM, which has kicked off an automated workflow to could say… Welcome and click on this link, click this link if you'd like to book an inspection time or do more details on our website, we then track a consumer's view of the website.


Joe Hanna:

They may have shared it with their friends, sent it in an email, jumped on the post up to social rather. We know how many times they've opened up a phone, opened up an email that was sent from an agent through their CRM. How many times they picked up a phone or whether they went for an open inspection. Now, all this data is providing us really meaningful information about the interest of a person. How you leverage that and exploit that in a way that isn't taking away from their privacy, but actually having providing real value by personalising your communications with them, one size doesn't fit all. And still today, we largely see that agents communicate in a one size fits all to consumers, has a massive impact on, on how important the relationship goes, which is the third theme, which is around relationships.


Joe Hanna:

I think more and more technology will enable agents to nurture their relationships with the consumers and have longer lasting relationships that are less transactional. Over the journey of property ownership or living in my patch, so to speak. So I don't actually see massive disruption over the next five years in the way that the market segment works. I don't subscribe necessarily to the view that they'll be less agents in the next five years. I don't think that's true. I think the agents will be more efficient, more effective, and be able to actually spend more time because it's still tough to buy and sell a house and rent a house as a consumer. And there's a massive segment of our population that just doesn't engage because it's all too hard. And I think if we make, if technology made that easier, then agents would be even busier as more people would be entering and exiting the market.


Kylie Davis:

Do you think they'll be fewer real estate agencies, do you think we're heading towards bigger agencies that are a bit and less sort of mums and dad stuff?


Joe Hanna:

That's a really interesting question. I think there's, certainly a push towards a consolidation of agencies. There's no doubt. And if you think about the drivers for that one, is clearly technology. Now being able to have a automated template or an ability for automation of up branding process from head office down. I think you can cut both ways. Technology can also help the smaller independents to compete with the larger players. I guess, what we're seeing is, and this is to your earlier question, is consumers also want more of a concierge approach to their relationship with a, with an agent. In the old days agent is very much transactional on the buy, the sale or the rent. Now consumers want to know more first time I'm entering the market.


Joe Hanna:

Do I need insurance, how to help me with a home loan?What do I do about my utilities, connections and moving? So I think if technology can help agencies through automation streamline that process, and again, build meaningful relationships, then it becomes more around the relationship as opposed to whether they're part of the franchise group or not. But look, I think it's an each way bet over whether… Actually, no, I'll answer the question this way. I think there'll be more franchise groups and more independents and probably not as many small franchise groups.


Kylie Davis:

Got it. So Joe. What do you think the future looks like for the Proptech Group? What's on your roadmap that you can share with us in an open market way?


Joe Hanna:

Look, certainly, as we say, publicly more of the same. In reality, we are getting good penetration of our core systems to our existing customer base. We've gone from 1.06 products per customer to now 1.85. So ultimately the idea to, for our customers to save money on their technology spend by consolidating their vendors into 2, 3, 1 is ultimately what we want to continue to do. So in Australia and New Zealand, we see a significant opportunity for us to continue to penetrate and infiltrate the broader Proptech play as it pertains to agents. Our focus is primarily residential, but we're getting more and more into commercial as well with VaultRE's commercial module and now Eagle launching a commercial module.


Joe Hanna:

And then beyond the Australian New Zealand is, we're in the UK already with about a 1% market share there. We see significant opportunity for us to almost replicate the playbook for [inaudible 00:40:05]. I think for your listeners in particular one good thing about Australia is we are very advanced when it comes to Proptech and the adoption of technology, the UK is twice as big in terms of number of agencies. And I would have to say twice as backwards.


Kylie Davis:

I agree. I had this conversation with James Dearsley almost every month and he tells me how wrong I am.


Joe Hanna:

Well, the challenge is. We can't be too Aussie when we go over there because they'll hate us, but putting reality, there's so much of what we do here that is, can be lifted and shifted to the UK. And that they'll benefit from, so for Proptech group in Australia, we've got a clear pathway for continuing what we've been doing to date, consolidating some of the market opportunities, getting our agents to be more efficient, through a single platform, to do everything ultimately, and then obviously launch out into the UK and other markets globally.


Kylie Davis:

And are you looking for other techs to, in, have, to integrate with you? If there's any prop techs out there that want to hit you up?


Joe Hanna:

Absolutely. We're always looking for integrations. I mean, most integrations as with, as it is with many other suppliers here is agent led, or agency led. We've got now over 1,500 API integrations with our Proptech Group.


Kylie Davis:

Wow.


Joe Hanna:

So we see more and more happening all the time. In reality, it's a really good opportunity for us to understand some of the more innovative or more cutting edge Proptechs that are emerging, but yeah, we've got an open call, always for any Proptechs that want to integrate or look at some type of partnership or M&A opportunity to reach out to us. Absolutely.


Kylie Davis:

Awesome. Well, Joe, it's been absolutely fantastic having you on the Proptech podcast. Thank you so much for your time.


Joe Hanna:

Thanks Kylie. Thanks for having me.


Kylie Davis:

No worries. So that was Joe Hanna CEO of the Proptech group, an ASX listed company that is executing on its strategy to deliver a suite of Proptechs that all integrate with each other, to allow real estate agencies, to own their own marketing, lead gen and efficiency driven ecosystems, to give them the option of being independent from real estate portals. I love being able to question Joe on the ins and outs of becoming and running a listed company. We tend in Proptech to hold up this idea that listing on the stock exchange is the ideal way to exit or to cash in, but there's no doubt, as Joe shared, that there's a lot of work involved in it and there's cost resources and time. A lot of that, that goes into running a listed company. And they're very different to starting or scaling up. And that may not suit every founder and your share price can on occasion do things that you genuinely can't control.


Kylie Davis:

Now we've seen in recent weeks and months with some big deals in the Australian Proptech space with Console being purchased by REIT [inaudible 00:43:00], ActivePipe, merging with Moxi in the U.S. Aire being purchased by CoreLogicc and MRI purchasing Box+Dice. We've seen that an IPO is not the only exit. In fact, it's probably in the minority and we currently seem to be going through a consolidation phase in Proptech, where highly successful scaling businesses are being picked up by larger first generation Proptech corporations who are recognising that there's gaps in their tech stacks and are working to deliver more seamless offerings to their clients. And these have had some great outcomes for their founders. And I think we'll see it start to address some of the complaints that agents have had, about there being too much Proptech out there and just too much choice. Because what is happening is, that we're starting to see more out of the box or off the shelf, all-in-one options that have significant domain expertise in their different elements.


Kylie Davis:

And I love that it's snap together or snap apart. The way the Proptech Group are approaching their suite of products, you've got the option to connect your tech stack up, brick by brick, or to move straight in with everything in one [inaudible 00:44:05] place. And that really does give agents the best of both worlds. Now, if you have enjoyed this episode of the Proptech podcast, I would love you to tell your friends or drop me a line either via email, linked in or on our Facebook page. You can follow this podcast on Spotify, Google podcasts, Anchor, and Apple iTunes. I'd like to thank my podcast producer, the fabulous Charlie Hollands and our sponsors Direct Connect, making, moving easy Dynamic Methods. The name behind Forms Live, REI Forms Live and RealWorks. And the Proptech Association of Australia. Australia's Industry Body supporting the flourishing Proptech community. Now, if you're an Australian or a New Zealand Proptech, who would like to be on the show, drop me a line by a LinkedIn or kylie@proptechassociation.com.AU. Thanks everyone. Until next time, keep on prop ticking.