AIPIS 143 - Real Estate Chat Apps with Justin Shum

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Welcome to the AIPIS show for accredited income property investment specialists and those who desire to be. This is your host Jason Hartman where we're we talk about increasing your income, your productivity and just generally having a better life while serving your clients better with America's most historically proven asset class income property. We have a great interview for you today and we will be back with that in less than 60 seconds.

Hey, it's my pleasure to welcome Justin Shum to the show. He is CEO of Avenue It's a live chat services provider for for the real estate industry. Interesting business model you're going to hear about here and maybe we'll talk about his other business. Ready chat. Justin, welcome. How are you?

Thank you so much for having me. I'm fantastic.

And you're coming to us from Toronto, Canada today, right?

You got it? Yep.

Great place. So what are these apps and what are they doing to the business model of real estate?

If anything, we're seeing, you know, you've heard a lot about on demand economy. You can get, you know, groceries on demand, Uber is on demand and you're seeing a lot of on demand apps attempt to update the real estate industry in the same way. But unfortunately for houses, you can't really purchase that instantly or view a house instantly. There's a lot of requirements to achieve that. What we're doing though is allowing consumers, investors to have instant access to knowledge that you can't find on Google or on the Internet that easily. Because if you know how Google works, it indexes historical information, you may read an article that's, you know, out of your area. And so the best way to do that is to tap the minds of a real estate agent. And so Avenue allows an investor to broadcast a question about a specific neighborhood property that they're interested in and then get a local licensed real estate expert to answer in real time and provide further advice about a specific property or a gain neighborhood. And so we call it knowledge on demand platform. Perfect for investors who are looking to get into a market and gain the Hyperlocal access inside knowledge from a local real estate agent without any strings attached. You don't have to meet with an agent, you don't have to sign a contract. You get the knowledge upfront and easily and for free, I should mention.

Yeah. So what's the business model behind that? I mean, I guess what happens is just to understand first how the technology works. Your text probably goes out and sends alerts to a whole bunch of real estate agents in that area and then the first one who responds gets the lead. Is that how it works?

Yeah, it's quite similar to that. So it's a chat app. It's not through native SMS or text app on your phone. You download the app, open it up, broadcast a question and that question is actually sent out to all the users in the neighborhood like you said. But it only broadcasts that question to agents who match your similar likes and interests from your Facebook profile. So the user actually has, or the consumer or the investor has to log in with their Facebook profile and the agent has to log in with their Facebook profile. And based on similar interests, you know, same language you've liked, the same brands, location, obviously age. We factor all these into our algorithm that make the ideal match. So we almost treat it like a dating app, if you will. And the reason why we do this is because we want to match investors, consumers, with an agent who understands your lifestyle, where you're at, the type of investment you're looking for, and break down all those social barriers. So. So that's exactly how we route your question to agents in the area that match up similar personality characteristics based on that info taken from Facebook. And then once those agents are alerted, they do race to respond with an accurate answer. The first one that responds is matched with you in a private and secure conversation where then you can ask them anything about real estate investing or homeownership.

Okay, great. When that happens, I mean, is this just. The real estate agents are out there hungry for leads and, and they're just willing to take a lot of these free inquiries and in hopes they can convert them to a client.

Well, the great thing about it is that we try to make it not sales driven. I mean, the perception of an agent is that they're commission hungry only. They only care about themselves. And we wanted to help the industry change that. And that's why we have 10,000 agents who have signed up for this service already to be concierges. We vet them obviously and make sure that they are licensed and it allows them to position themselves as neighborhood experts. Again, by giving up the knowledge winning business that way. So for the consumer it's a win win. You don't have to speak to them, you don't have to meet with them. There's no contracts, no strings attached. You simply get the information. And if they're providing you with accurate information and you like them personality wise, then obviously you're going to want to work with them. So that's our whole philosophy. We're helping the agent position themselves as a neighborhood expert. And yes, it is a lead generation product. And you asked about the business model before and agents do have to pay to Access Avenue, but again they are only going to win business if they're providing accurate answers and knowledge upfront.

Okay. Oh, so they actually pay what, a subscription fee or do they pay per lead or how does it work?

No, they actually pay a subscription fee and it's very minimal. It's only $20 a month.

So they pay that subscription fee, they get the lead. You know, they've also got to pay with their time, of course, you know, in responding to questions and so forth. And really all the questions are just by text, you know, isn't real estate too complex for 140 characters?

For 140 characters, yes, I would say so. But this is a text based conversation. We're all texting more than we are speaking with text based conversations, there's no friction. And we wanted to remove all friction involved with having to find, connect and hire a real estate agent. Because entering the market for a first time home buyer or an investor, you don't want to deal with a bunch of agents. Because we firstly again we perceive them as sales driven people, salespeople and we just want the information up front. So the best way to do that is through text based conversations. Right. We're texting with all of our friends. It's super easy, it's convenient. You don't both have to agree to a time to speak. It's just the preferred medium. And that's why you see Snapchat and WeChat and Facebook messenger, all of these platforms are blowing up like crazy because it's the preferred and most convenient way to communicate.

So this is interesting that you saw this need in the marketplace and you're filling it. How old is the app by the way?

It just launched actually, so it's available currently in the App Store and Google Play, just Search Avenue and you should be able to come across it or you can go to the website and download it.

Yeah, fantastic. And what's that website link?

It's Avenue IM as in Instant Messenger. So Avenue im.

Okay, great. What other things do you see in the industry in terms of technology or business model or changes, you know, and it may be related to one of your two tech products or just something else in general. Just wanted to get your thoughts on that.

Yeah, you know, my team, we're made up of very intelligent and young tech and business professionals. And at the end of the day, we're all consumers, we buy things, we love technology, technology, and we're all first time homeowners. Where we're at currently is in the post search era for mobile consumption. And what that means is the days of going to Google, typing in a question, searching multiple pages of articles and websites for just to get your answer are really highly inefficient and time consuming on a mobile device. That's what I mean by post search era. That type of process is dying and phasing out. What we're seeing now is a lot of interfaces and services being integrated into text based conversations. You see this with WeChat in China. They're dominating. And what you can do is order a taxi, you can order food, you can book airplane tickets, all through a simple chat app. We call it the Conversation is the new interface, this whole concierge service. So that's what Avenue is really doing for the industry. Consumers are becoming accustomed to this type of service. You know, no more searching. I don't want to go to Expedia on my mobile device, filter flights, price and search for all this stuff myself. It's time consuming. I'm on the go. I need this answer now and I want somebody else to do it. So we're seeing a lot more companies gravitate towards this business model. Companies like Facebook, Google, even Apple with you know, their Siri Assistant built into the iPhone. And we're simply taking that technology, that type of business model, or model rather user experience, and we're updating the real estate industry to that expectation. We're allowing agents to be the concierge, the human powered search engines that drive this information, drive transparency into their minds and their expertise through this conversational technology that we're all used to and we're using on a daily basis, texting our girlfriends, our wives, our kids. So that's really where things are headed. And Avenue is simply an incremental innovation that's helping consumers and agents upgrade to that social change, that expectation.

Yeah, yeah, interesting, good stuff. How many agents do you have on the platform so far? I mean, I know it's just, it's new. So, you know, you're probably just getting it started, obviously, but there are so many out there, it's unbelievable.

You know, there are.

We're probably up to. Yeah, I'm just going to guess here because I haven't looked lately, but we're probably up to 1 1/2 million NAR members. That seems like everybody and their brother is a real estate agent. Of course.

Yeah, I've heard, I've heard, you know, it's up to 2 million, but you know.

Yeah, by the way, I just want to make a distinction there. I'm talking about members of the national association of realtors versus just licensees. There's probably upwards of 4 million licensees in the US but yeah, I don't know what it is for NAR nowadays.

Even I don't know exact numbers either. But with our platform, we've been marketing this for a few months now. We've been all over the press and the media. We recently won Realogy's Forward event. They gave us $25,000. We beat out all these other startups because they saw the problem that we were solving there. And so we have 10,000 agents that have signed up for our service already to be concierges. And we're simply using that force to cater to the millions of home buyers and sellers investors out there. So that's how many people have signed up so far.

Very interesting. I just searched that while you were talking and I'm going to share some interesting stuff with our listeners. I think you'll get a kick out of this.

Let's hear it.

Yeah, so in 1908, which is probably the first time they took the Census, I think NAR was started a few years before that. It had 20 local real estate associations. And take a guess how many members.

Oh, geez. I'd say. I'd say a couple hundred.

Actually more than that. 1646. Back in 1908, as we saw the re engineering of the corporate corporation and the downsizing and the layoffs and all that crazy stuff. Go on. I'm gonna go with 1990 as the number that things really started to kind of change in terms of the way the American corporation. 810,000. Okay. And now in 2014, which is the latest number posted, 1,099,000. So yeah, not that many really. We were thinking a million 5, 2 million. But again, in terms of licensees, there's probably upwards of 4 million by now, I'd assume in the US and that does include Canada. Of course. You've probably got like another Another hundred or so in Canada. I'm teasing.

You know, Toronto, Toronto is, is ridiculous. It has 30,000 licensed real estate agents in just Toronto.

Wow. Yeah.

And they call Toronto the condo capital of North America. So you can throw a penny out the window and hit a agent in between the eyes in Toronto.

Yeah, sure you can. It's. It's amazing. It really is. But that's a good, big marketplace for you for your app.

Yeah, it is, it is. But you know what our target is the US you wouldn't believe how slow Canadian consumers and even agents here are to adopt technology. They really are two to three years behind.

That is really surprising to me. Do you have a theory behind that?

You know what, one of my other businesses, ReadyChat, it's in the chat space as well. And 99% of our customer base is in the U.S. we used to try to sell into Canada and we just would not succeed. And it's because we're, we're Canadian. It's the mentality. Oh, you know, you know what? I'll just wait until my competitor does it or we'll wait till next year. Hey, you know, it's free. Take it now. You know, I'll think about it. It's just we're not aggressive. It's the market size of 300 million in the US versus 30 million here in Canada. So the competition is more fierce in the U.S. so obviously people are taking more risk and trying to do new things.

Yeah, right, right. Yeah, that makes sense. Interesting. Do you want to talk about Ready Chat called before we wrap up?

Sure, of course. Yeah, I'd be happy to.

Tell us about that service. I mean, when you, when we go to various websites, of course, there are these chat boxes and I personally as a consumer kind of hate them because I think you just waste your time talking to someone who's using a script and doesn't really know anything. And, you know, they're managing six other chats at the same time. So, you know, it's always really slow.

Right.

But this at least is designed for a specific vertical. I love that. Because, you know, you're not going to get just a general sort of call center type person. Right. You're going to get someone who has some knowledge of real estate, hopefully.

Yeah, exactly. And that's the key. Right. Firstly, at a high level, Ready Chat provides chat services for, you know, real estate agents and brokerages out there. We place our chat widget on your website and then the call center services behind that. Because we all know, you know, as an agent Yourself, you can't sit behind your computer 24 7. So we take care of that for you. What makes us special is that again, you just said it. We're real estate only. And it doesn't matter what city or region we're in. We're always engaging with the buyer, seller, maybe a landlord or a renter. And because of that, these conversations only go four ways. And so we can anticipate already what's going to be asked. You know, our key goal is to move them through the conversation quickly, get them to commit to an appointment. So that whole process is very efficient with us because we're catering to one segment and in terms of, you know. Yeah, having multiple conversations, we do have multiple conversations at a time. But unlike a big call center who really try to scale their workforce, we cap it at only a couple conversations at a time. So, you know, consumers are never waiting long waits. We guarantee a 20 second response time because this is lead generation. This isn't tech support where people are willing to wait around for 10 minutes to get a response because your computer has a virus. These people, if you're not responding within seconds, they're going to leave and they're going to go to your competitors website where they can get that info or get that service. So we have to be very speedy, guaranteed response time in 20 seconds. And we don't scale our workforce to maximum capacity. There's always room there to breathe.

Yeah, yeah, good stuff, good stuff. Give out your websites. You mentioned Avenue, but is that where people go or do they go. They can go to the app stores, of course, just any other resources you want to share.

Absolutely. So obviously you can search for Avenue app or Avenue Real Estate in the App Store or Google Play, you can download that way. But the easiest thing is to do just go to our website at Avenue im, as in Instant Messenger, Avenue im. You'll be able to click a button and download it yourself from there For Ready Chat. Just Google Ready Chat will come at the top. You'll see a bunch of customer reviews. We work with some of the top independent real estate brokerages and franchisees across the US and Canada as well.

Excellent. Justin, thank you so much for joining us.

Hey Jason, it's been my pleasure. Thank you so much for having me.

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