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When creating a real estate brokerage, there are many decisions that must be made
- Selecting CoFounders
- Finding staff to help with the things you don’t do best
- Selecting your marketing and target markets
In this episode, Katie Ragusa, VP of Product at TRIBUS, interviews Mark Choey, founder of Climb Real Estate in San Francisco and founder of HighNote Labs on starting and building a brokerage.
TRANSCRIPT
Eric Stegemann (00:00):
Thanks for listening to Brokerage Insider. This week’s episode was recorded live during the Xplode virtual conference on Thursday, September 24th. We look forward to returning to our regular scheduled program soon, but until then enjoy this session in this episode, our VP of product, Katie Ragusa interviews, Mark Choey, the co-founder of Climb real estate and the founder of High Note labs.
Katie Ragusa (00:27):
All right. So a quick introduction as we get back into things for this session Mark is the co-founder of Climb real estate and he is the founder of high note, which is his latest tech venture. So we’ll talk about both of those, and we’re really going to go through his experience in starting creating, building a brokerage company and also a real estate tech company. So tons of experience in this world. Thank you for joining us, Mark.
Mark Choey (00:56):
Thank you for having me very excited. How’s everyone doing
Katie Ragusa (01:00):
Good? We’ve got an active group in chats. I’m going to keep an eye on it and see what people are saying. If they want to ask questions, contribute to the conversation on if you’re dropping any tips for brokerage websites. If you could maybe even put that into the chat, cause I know people are loving to look up things like that that get recommended. So first off Mark, I gave you an intro that’s real estate specific, but actually prior to that, you have finance background. So what brought you from the world of finance to loving the world of real estate and sticking with this?
Mark Choey (01:34):
Oh my God. Even before that I was an engineer, so electrical engineering and then computer engineering and, you know, my, my foray into finance was really through a tech. We were building neural networks to learn how to trade stocks on the stock market. So although I did work for city group and I was building stock trading systems for Siemens next door at Germany. I was just working for these financial companies, but I’m really a techie at heart. And you know, I I’m really just interested in using technology to solve hard problems. Right. And that was, that was the general theme of my life. And I think you know, building a stock-picking algorithm to profitably trade stocks is one of those and I saw a big opportunity to real estate. So we moved to it in in, in 2005 timeframe.
Katie Ragusa (02:36):
Got it. So easy, easy problem solving is not your thing.
Mark Choey (02:40):
Yeah. You know, we, we like the big, big ugly problems, the self.
Katie Ragusa (02:44):
Great. so you talked about intro to real estate, so you made that transition. You have this, I can only picture an idea for climate, the beginning word. It’s just starting to develop in your brain. So what made it impossible to ignore? You’ve had to start this company
Mark Choey (03:04):
Climb real estate started in San Francisco and it 10 years ago, or actually 2005 that’s 15 years ago. You know, tech had already gone through a mini boom, but we all, everyone kind of knew that tech was just getting started and there was this part of San Francisco that was undeveloped. And it’s still partly undeveloped, but you know, there is a section of San Francisco where there was a this big movement to put high rise condos in and high rise towers because they, San Francisco media to build up and tech was coming in and they were coming in fast and furious. And what I mean by tech, I mean the tech companies, they were relocating their offices in San Francisco to tap into the talent pool, to attract employees who track workers and all the venture capital money was in the Valley, which is a, you know, half an hour, 45 minute drive to the South.
Mark Choey (04:00):
So the city was putting in a lot of effort and infrastructure and development into this area of San Francisco. And, you know, as I was getting into real estate and trying to understand the opportunities, I was like, huh, this is an interesting place to maybe set up shop because if we set up shop and we’re able to capture some of the market share in this district which is called Soma South beach, South of market, South beach then we could grow with the city as the city grows. And, and that’s why that’s exactly what happened. You know, 2005, I was an individual agent. I met my partner my business partner, and then we decided to form a team and we grew a team. We use the Keller Williams the great Keller Williams book. I think it’s called millionaire real estate T or million millionaire real estate agent.
I think it is or million dollar real estate agent can’t remember. But it’s all about systems and processes on how to build a team. And that’s a great book if you have never read it it is just brilliant book it’s way ahead of its time, but it’s also common sense. It’s how do you build a very efficient and operational team to grow? And we, we modeled our business around that and we grew a sales group and then we eventually launched the brokerage in 2010 right during the ends, kind of like the financial crisis during the financial crisis. You know, which happened at 29 2009 or, or, or so we came out when it was really bottoming out in 2010.
Katie Ragusa (05:37):
So let’s go back. You mentioned you had a partner in this venture, so I don’t know if there’s any brand new brokers or even agents in this room who were thinking about starting their own brokerage. How do you decide if having a partner and taking that on versus doing it solo is the right decision for you. You know, I think you always
Mark Choey (05:58):
Need a partner, you know, you, you in life in general, and it depends on what you’re trying to do obviously, but the larger or more difficult of a task, you need someone else. You could only be good at certain things. And, and, and what you notice is that you need a compliment, right? You need someone that’s going to you know, if you’re, if I was a tech, finance business guy, I’m very into efficiency and operations and, and technology and how to use it better. I needed a marketing guy. I needed a sales guy on the other side and someone that could that new branding, that was a you know, a fantastic sales leader, somebody that could understand brokerage marketing and drive those campaigns, you know and the message, and that is critical because if you, you have the best system and you have the best operations and the best tech, but if nobody knows about it, you know does it exist?
It’s sort of like if a tree falls in the forest and no, one’s there to hear it, you know, did it fall? You know, so w you know, the big lesson that I learned is you just need to find someone that’s going to help, and they’re going to be, they have to be different to have to have another type of brain. It needs to be able to have different skill sets to compliment yours. And there’s pros and cons of that. I mean, you’re going to fight, and you’re going to argue, but if you have the same goal and the same timeframe for that goal you know, those things will all come to pass because you know, I just feel you need to cross pollinate ideas and they’re going to approach it a different way than you are. And that’s the only way you’re going to succeed on a, on a larger scale.
Katie Ragusa (07:41):
And sometimes those disagreements make you better. It makes you consider something you never had before. So since you’re not taking these super human approach of, I have to be great at everything and you are working with a partner, what are some of those early meetings like where you’re making those decisions of what Climb will be okay.
Mark Choey (08:00):
You know, it, it was it was crazy. It was, it was, we, we thought it was funny. We, we, we thought very big picture. You know, I thought big picture from a technology business operations point of view strategy. And he thought big picture from a marketing and sales branding perspective. And we discovered early on that we needed someone that was going to be the broker, someone that was going to watch the details dot all the I’s and cross all the T’s for us, and really run a tight ship. In San Francisco, in California, it’s a very litigious state and real estate is not cheap. So you know, people usually fight over things in real estate. And one of those big items is nondisclosure. Another big item is square footage, discrepancies. And these are the two big items and, you know, it’s tenants rights, there’s all kinds of rent control laws. And, and so you needed someone who was going to mitigate risk. You need someone that was going to be a great broker of record someone that was going to be someone watching the money and being, and watching all the details and making sure those things were in place. And we weren’t getting ourselves into risky positions. So the early meetings were discovering that we needed that kind of help. And we brought in a third partner to do that. And I think it’s really special.
Katie Ragusa (09:30):
What’s that people first process second. Right.
Mark Choey
You know, it’s I mean, you could only go so far as process with process and eventually you just need talent. You need people you know, you also need focus. I think when you first start out something you want to, the great thing about being a real estate as an agent and in a burger joint, I mean, the world’s your oyster, you can, you can work as hard as you want, or as much as you want earn. And, and what you earn is generally commensurate with the effort that you put in. So it’s the ultimate entrepreneurial model, right? If you work half time, you’re going to get half the results, or sometimes less, if you work, full-time, you’re going to get great results. If you’re going to work more than full time, you’re going to get even better results. So it’s, it’s commensurate right with your efforts.
So but you need, you need great people and you need people to drive it. You need to think big and you really need to overcome those obstacles and find help. And so that, that those early conversations were about what are our dreams? What, where do we want to go? You know, in the beginning also there was, I, I would be lying to say that we didn’t, we wanted to go national. We, but, you know, we say Climb. The brand was this new urban, millennial techie younger brand that really resonated with a lot of people. And you know, a lot of the consumers, a lot of agents and a whole generation of, of, of a whole generation of, of people and
Katie Ragusa (11:11):
Brand, or, yeah, I think that’s where you guys really, really excelled in establishing that company. You weren’t just another real estate firm Climb was a brand, and I’m not one to love the word culture. I hate that question when I’m interviewing tech talent, because it can be such a vague thing to so many people and mean different things. But when you’re in the presence of Climb, you feel it like it was real what you were. So how did you build that in and become them?
Mark Choey (11:44):
You know, it, it’s, it’s, it’s really funny. It’s also a very, it’s a very poignant life lesson. It’s sort of like, you can’t be everything to you cannot please everybody. And if you’re going to try to please everybody, you’re going to please nobody. So what you end up having to do is you need to decide who you are going to be, what you’re going to be and own it. Right. And, and, you know, we, we were not comfortable selling to you know, selling traditional Victorians in Pacific Heights. That was it, our people that, wasn’t what we did. We were much more comfortable in the urban markets graffiti, yeah, graffiti on the walls you know, really experimental art stuff that was outside the box, things done differently, but, you know, in a way such that, wow, you come in here and you realize there is some other vision, there is some other movement.
There’s some other thing that you could tell there’s confidence behind it. And, you know, if we had just put up graffiti on the walls and then done with it or, or, you know, done this sort of logo or this kind of branding, or had this kind of picture of a person, I mean, people can tell if you’re faking it right. And we all know the brands that are trying to be something that they’re really not, and you just can’t, you know, it’s transparent. People will know. So it’s very much like the analogy I would make is, is, is when social media first started coming out and Facebook and things like that. And there was a big debate, whether you should try to have one account, one Facebook account or a professional and a personal one. And, well, I don’t want, you know, my clients to see that, Oh, I’m on vacation here.
Mark Choey (13:49):
Or I have kids, or I live here, I go to do these things. And and it just sort of became like, well, that’s the problem, right? It’s like, you need to be who you’re going to be and own it. There is no hiding anymore in this world. And some people are going to like you and some people are not. And, you know, but if you, if you project confidence and you decide, this is the way you’re going to be, you like me, great. If you don’t, that’s good too. You know, usually things have worked out right. And so we did that and we did that. You know, we took that model and we just said, this is the way we are. And we know it’s great. We know it’s great and resonates with certain types of people and that, and that’s what we’re going to do. And we, we attracted a following and attracted you know, a bunch of loyal agents and consumers. And then it started getting picked up nationally. We started winning awards and, and different media outlets. And eventually we were acquired by really G to be their urban brands. So anyway,
Katie Ragusa (14:52):
The dream ending to some stories. So the early days of deciding on a brand committing to that direction, sticking with it and weaving it through at your office day for your marketing materials, your tack, your website, all of it, what tool, that same story. So you said that attracted a following. So did you have to recruit, or did people just come to you?
Mark Choey (15:15):
It’s, it’s funny. It’s you’ll find that when you take a stand on something those people that agree or resonate with your stand will come to you, right? And you just need to provide leadership. You need to say, this is where I’m going to be, and this is where I’m going, and people will follow those that don’t you know, if they’re at the edge, you need to recruit them, right. You need to convince them who you are. And and that works, that works as well. But you know, we, we sort of knew that the message really resonated in the message was about being yourself being you know, instead of someone in a suit, you, you, you, the picture of a, of a, of an agent in, in casual clothes sitting in the sun, looking at their phone, doing work was the message we had, or maybe you’re on vacation somewhere, and you’re on the beach and you’re, and you know, it, we’re trying to sell a lifestyle.
(16:17):
You’re trying to sell a lifestyle and really, it, it resonates, you know, that the message is about freedom. It’s about individuality. It’s about being your best, you know, we, we, and, and finding the best in yourself, inclusion was a big one. You know, we had transgenders, we, we had a lot of minorities in our organization and it was you know, we had a, a wide swath of people agents in their twenties two agents in their sixties. So it was a very eclectic mix of people. The culture was about that. It was about you know, we didn’t have offices. We felt like offices made the place non a little bit more hierarchical. Like people were always competing for the best office, or like, if you had the best office, the corner office, you were of higher status. So we, we got rid of all of that. Our website the agent pages, there was no order to them. You know, top producer wasn’t on top. It was always random
Katie Ragusa (17:28):
Pause, anybody to leave and back up and go,
Mark Choey (17:30):
Well, I mean, they loved it. They love the fact that we are, you know, I deliberately said when we deliver it, when we show the agent pages, the agent roster, it’s got to be a random order every single time. So that there’s no number one, the person that has the last name that starts with an a, isn’t always on top. You know, the, the founders always at the top, you know, where everyone’s equal. Everyone’s the same you know, Chris and I, my partners and my partners, and I, we all sat together with everyone. We had a big open office, coworking space you know, co-working style space no assigned desks. We didn’t have like, w in the beginning we had like file cabinets. And then we were like, hating that. And so we got rid of those. We didn’t, we didn’t have, we didn’t have landline phones no extensions, everyone, you know, we’re like, well, everyone’s got a mobile phone. Why don’t we need a landline phone? I don’t understand. You know, there’s no, like when you call into the number a company directory or press three, to look up this person none of that stuff. And, you know, it was just, it was just different at the time. And, and you know, now it seems, it seems standard and normal, but it, it was just such a, it was a unique take on real estate brokerage.
Katie Ragusa (18:43):
And each brokerage is different and tells a different story. So the urban market casual like the graffiti art, like you were talking about before, that makes you guys unique, but it’s not necessarily saying, Hey, everybody real estate needs to be less casual. Whatever makes you, you would you say to that broker, who’s having trouble recruiting, retaining agents, getting clients to come to them that they just need to dig in and reflect and figure out who they are that makes them unique.
Mark Choey (19:13):
Yeah. You know, you that’s exactly what it is. You know, if you, if you’re going to be you know, just find out what those characteristics are, and, but you gotta make sure they’re differentiating, right. You can’t be like the same, like everyone else, because once you’re the same as everyone else, then you’re competing on one thing and you’re competing on price. You’re competing on split, you’re competing on what do you get do for me, right. There needs to be some sort of emotional connection to your mission and whatever that mission is you know, and it could be anything and you know, it could be you’re serving one neighborhood or maybe you’re, you’re this income level, or maybe you know, you do military you know, that, that sort of market, or you’re in condos, or you’re in high-rises, or you’re in traditional homes, whatever it is, you need to own it.
And not worry about being someone else, but you, you also have to be slightly different because otherwise if you don’t stand out in the market then what’s the difference? Why would they pick you? Right. so, you know, we were very fortunate that we, we, we stumbled upon a a theme and that resonated in San Francisco and, you know, it, it really we started getting a national following and everyone around the country wanted to, wanted to do what we were doing. So we were very, very blessed to have come up with that formula.
Katie Ragusa (20:38):
Great. and while at Climb, you guys actually launched Climb labs, which I think was a breeding ground for new tests. So we talked about the brand and part of showcasing that brand is obviously technology, but you’re in San Francisco, you’re a former engineer. I don’t see how you can keep away from your own hands being in tech. So tell me a little bit about Climb labs and what kind of part that played in your brokerage. And then we’ll talk kind of in your latest venture. Of course
Mark Choey (21:08):
You know, one of our hallmarks was innovation or the use of innovative technologies to do our business better. And I was always looking for the latest, the best, the greatest thing on the market. And we were always surrounded by software tools by late new processes and gadgets that would help us do business. And I would implement them personally. So my, my I, my business, I grew to a, I became the number two condo agent in the entire city of San Francisco for a number of years. And I, and I could not beat the number one guy, but I’ll take number two. You know, and, and, but I did it through these innovative techniques that really did not, were not being used at the time. You know, we were very big on blogs. At the time they were very, very popular.
Mark Choey (22:02):
We were very big on social media. We’re very big on a whole host of things that, that were at the time were very innovative, very different. And you know, we, we got this following. People started to want it to use, I was teaching these techniques. You know I was teaching, you know, all these different technologies for them. We’re doing chatbots. You know, we were doing it, you know, exploring different partnerships with different tech companies. We were the first brokerage to implement real scout way back in the day. We, we, we were the first brokerage to, to use Matterport. We were doing drones. We were doing all kinds of things to really get this edge and, you know, and again, it was in a lesson I learned from my partner about marketing. Look, if you, if you do something and nobody knows about it, then did you really do it?
Mark Choey (22:54):
Right? so we, I decided to build Climb labs as a way to celebrate all of these learnings that we’ve had, but also the failures too. There was a lot of stuff we tried that was like, that was really stupid to do. And, you know, like you gotta try to learn. I mean, I’ll give you one example is Foursquare. You know, it was a social media check-in app and, and you can become a mayor of a place by checking in there. And then the more you checked in, if you were number one in the number of check-ins, you became the mayor. And so I thought, Hey, this is a great way to, you know, own a neighborhood or own a building. And so like, you know, there was these condo buildings in the city, and I, and I kept on checking in and these condo buildings and, you know, our agents were doing it too. And there were all mayors of our buildings and it gave you exposure like, Oh, Mark Shaw, X, you mayor of this building, or, or, you know, Matt Finley mayor of this other building. And I thought it was a great way to say that, Hey, I’m here. And, you know, I’m, I’m the number one guy in this building, but, you know, fourth grade didn’t take off the check-in feature never took off Facebook really took off. So, you know, so we celebrate it
Katie Ragusa (24:03):
Versified, you might have missed one that did, right. Okay.
Mark Choey (24:06):
Of course you need to, you know, I feel like there’s no such thing as failure. There’s only learning, it’s either you try something and it’s successful or you learn how to, how to do it again. And, you know there’s so many things that we had experimented with, you know, Matterport was one that we, we tried and it was, it was great. We thought it was a fantastic way to visualize properties. And you know, that, that, that won’t took off. Right. and you know, we tried all kinds of things. We try to like remote viewings, we would send a runner off to go check out properties and video it and then send the video off to all the agents. So they didn’t have to go look. So we were trying all kinds of things to try to save time and ultimately make more business for the agents and, and, and the brokerage as a result too. But you know, so Klein labs became our honeypot for new technology. So then once we started advertising, we were doing something on Climb labs, then more tech companies came and we got a lot of notoriety and a lot of you know, fame for this little incubator hub. And we were, we were very often first, you know, to try new things out. So that was really exciting.
Katie Ragusa (25:21):
You’ve tried a ton of things. I know you always have a really great list of favorite tools and apps and things. So maybe after the session, you can hang out for a minute and chat some of those in for everybody to share your current list. I don’t, I haven’t heard that in a little bit, but I know you’re always full of good tools to try. So with our few minutes that we have left, tell us a little bit about, so you left Climb and have since started Heino which is a technology venture. So you’ve seen a lot of tech and there’s, it’s hard to find a hole in tech anymore. There’s a million apps that do you know, so many choices for all these things. So what whole, or niche, or, or special feature are you able to deliver to prospects clients with this new venture that you have?
Mark Choey (26:13):
No. Again, I was an agent for a long time and I was a brokerage owner for a long time. And, and the one thing that there’s many things, but the, the, there was one process or, or, or workflow that we felt like was never being met properly. And it was, you have a lead that comes in and it’s a buyer lead or a seller lead, or what have you and your job as an agent. And your most stressful job is to close that lead. How do you close that lead? And so you, we, we, you know, we would have a marketing team that would help design presentations on the fly and customize things, because if you set a stock presentation to somebody it’s not going to close them as well as if it was customized, right. Or if you knew who this person was better, if you knew they’re a CEO at a tech firm versus maybe a first time buyer, you’re going to, you’re going to pitch them differently.
Mark Choey (27:08):
So we never found a tool that could do that well. And so I’m building it. I built, I built a version called a High Note, and it allows agents to quickly build winning presentations and pitching decks. And you build it on the fly. It serves like a beautiful wrapper around everything you want to deliver and you deliver it, but not only that, when you deliver it, it stands out, it looks better than the competition. It’s, it’s cleaner, it’s a nice presentation, but then you get data analytics as to what’s important to the reader. So the reader will open it though, you know, you’ve sent, you send the presentation with maybe five or 10 sections, then you notice what they’re checking out and you see how long they’re reading it. You get a lot of data, you get a lot of insight.
Did they look at the video? Did they read your testimonials? Did they look at the listing agreement? Did they look at the offer? You know, and there’s, there’s just so many agents that are using it now, and they’re winning business, they’re winning listings. They have so many stories about how a 2200 rookie beat the number three agent in a city. Another story the number one team in San Francisco saw that his, his lead was reading his listing presentation for two and a half hours. And then they canceled the appointments for the other listing agents they had. So another agent, one, a Zillow lead, a $2 million, a little lead. The first time she used the tool. So it’s just winning business and you know, using data, but also, yeah, but it’s also the way it puts power into agent’s hands.
Mark Choey (28:48):
It allows, it’s so easy to use. It allows the agent to build whatever they want and deliver it quickly. Then you get data on what’s happening, and it’s just all the difference in the world. And, and we just launched there’s a wait list of, of several hundred agents. But have you, have you, have you kind of reached out to me and mentioned Xplode, we could say something, we could get you to skip the list do a demo, but it’s just, we’re we launched earlier this year. And it’s, it’s getting great fanfare and it’s spreading.
Katie Ragusa (29:19):
I always love when tech comes from inside the industry. You’re not some VC from outside are looking at all these realtors that you can make money from. You’ve been in the shoes of the brokers in this room. So you’ve got a lot of great experience. You’re such a wise man. I love how you said that a lot of the book that inspired you was actually common sense. Maybe that’s the rule today, but let’s all go back to the basics and figure out who we are, and actually put in those common sense strategies into practice. So thank you so much, Mark. We’re going to turn it over to the next section, but thanks for hanging out with us. It was, it was fun. Thank you!
