AIPIS 153 - Landlord Real Estate Tycoon, Rich Capitalist & Millionaire Money Game with Zbig Jan Woznowski

This show is produced by the Hartman Media Company. For more information and links to all our great podcasts, visit hartmanmedia.com. Welcome to the AIPIS show for accredited income property investment specialists and those who aspire to be if you're a real estate, mortgage or financial professional, this is the place for you. We'll explore innovative investment analysis, sales, marketing and income generating strategies for the most historically proven wealth creator income property. Learn from the experts as they show you how to build a better business and a better life.

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 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. It's my pleasure to introduce Zbig John Woznowski and he is co founder and CEO of Reality Games and creator of the Apple Landlord Real estate Tycoon, Rich Capitalist and Millionaire Money game. And he has a very interesting take on learning how to be a better real estate investor and gamifying the whole process all around the world. It's quite fascinating. John, welcome. How are you?

Hello. Very well. I welcome you from Krakow, Poland. It's half past seven in the evening and I'm very happy to help you understand. Landlord real estate icon.

Fantastic. Well I was in Krakow many years ago and what a beautiful city it is. It's really just totally gorgeous place. So listeners, if you have a chance to get to Poland, make sure you check it out. So John, what does your game do? It uses location based social media, right? Like Foursquare and Facebook check ins and combines that with helping people learn to be better real estate investors, right?

Yes, that's right. Try to imagine Monopoly board game taken to the next level where you, you can travel your city, you can go all over abroad and you can use your smartphone and in the radius of 1km you can find properties you cross by. So we have over 50 million properties worldwide and each of these properties have the natural valuation based on real life popularity. So for example, the Eiffel Tower in Paris will cost $100 billion, Rockefeller center will be approximately $10 billion and the gym or restaurant somewhere in the outskirts will be around $800,000.

Interesting.

This is based on the popularity and our also artificial intelligence system is working to make it better.

Fascinating. This really leans toward commercial real estate because very few people check in at houses, right?

Yes, that's right. Basically the owners and maybe the tenants.

Right. It's all based on the database of check ins from just Foursquare or other apps as well.

Okay. Currently it is Foursquare, Facebook and we are looking for big data from Wikipedia to actually give a better understanding for these properties because we are actually gamifying big data here. In the long term, we would like to have the accurate information about every property in the world.

Fascinating. Okay, so what does someone do and how will it help us be better investors?

Well, basically you have three numbers. The one is the valuation of the property and each property has 1,000 shares. So you can buy from one share to 1,000 shares. If you have 1,000 shares, it means you are the only one owner in the world. 100% or you belong 100%. So the second two numbers are costs and rent. The cost is based on popularity, but the rent is based on daily check ins on Facebook or Foursquare. So actually you can. So sometimes you can make big money if there's a special event in that place. Or sometimes you need to find that you're actually losing because the costs are too high.

It's just like Monopoly. How often someone lands on your property and how developed the property is, which might relate to check ins as well, determines how much money you can make from it in terms of income, right?

Yes, that's right. It's a little bit accelerated because it's still a game. So it's accelerated that you can actually check every hour. Is there any rent coming to your property? Is there anybody who has checked in? But basically you are starting to have great fun after three, four days.

Mm, fascinating stuff. Well, what are we learning though in terms of being a better investor in real life? You know, it sounds fun. Take it to the real world. What do we do with this information?

Oh, first of all, you start to know that you have a competition and you need to be before others because there's a limited number of properties, especially in some areas. Let's take Belgium. And in a city center like 75% of the properties are already gone. It means that they are being owned by others. So first what you need to learn is that you have competitors and you need to be faster than them. We have already some stories like people were driving a bike all the city or going 100 miles on flat tire just to buy the property before their friends. So this is one thing. Another one is that you need to actually check your stats, check the financials that do you have an income because when you are starting to build your portfolio, you are starting to see that some properties you see often some of them need to be checked a little bit more. So you need to look at your portfolio to see what is giving you income and what is not. What is actually driving you to bankruptcy.

Right. Okay, how do we lay it? I mean say we've purchased a share in a property or we've purchased a whole property, I assume we get some money to start out and then we realize, hey, this wasn't the best property, there's a better property down the street or on the other side of the country. What do we do?

Well then what you can do is actually wait until you have a better income and maybe you'll have a chance to buy this property. Or you can, if this property is owned by someone, you can send him an offer and of course he can't refuse. So that's the way. Or there's also the third way, which actually we make money, is that you decide to accelerate your growth and you make an in app purchase. You buy virtual money from us through the bank and using your real world credit card.

All right, very interesting. Is there a social aspect to it? And actually before you answer that question, I was thinking that maybe one of the ways we can increase the value of our properties, our virtual properties is by making them more popular. Is there a way to do that to get more check ins? I mean we could do it ourselves, of course, we could get our friends to do it. Would that increase the value? Kind of like in the real world, marketing your property to more tenants and you know, making it more popular and increasing the value, increasing the income of it, right?

Yes, it does. Yes it does.

Tell us about that.

Okay, in the long term, the value of the property is increasing or decreasing based on history, number of check ins. So if you invite let's say 20 people to your apartment, all of them will check in, then you have your daily rent, big bonus for that. But in the long term there must be an additional event in the next week and then next month at least two of them to keep grow of your property value. That's for sure. We made that because people were exploiting us. We had like Chinese farm of 100,000 accounts which started to actually trying to kill our business by increasing the valuation of properties. And they made really a big mess in our economic system because it's very important to have stable economic system from our side to make games still playable and for players to see that it is still possible to get to the top ranks.

Okay, what else should we know about it?

Firstly, that There are over 2 million players worldwide playing Landlord. Landlord is available on iOS and Android devices. We are going to connect few more big data databases so that we will actually make properties more, more interesting and there will be more financial information, will be able to make wiser decisions based on that. But still we are working. This is the game but has the real world data and this is the life organism. So this is the life economy, it's not artificial one. So being a player inside this, you will feel that there's not artificial concept of the entire gameplay. You are on your own and you can actually beat others who have spent money if you make wise choices. And if you travel a lot, it's very important to travel a lot to walk, because this is the only way you can buy better properties.

Okay, so if I'm in California, for example, I can't buy the Eiffel Tower, I need to actually go there.

Yes, that's right. But you can perhaps find it on the marketplace because there's also the marketplace where people can list the properties. And of course the properties like Eiffel Tower will have a lot of bidders, I would say couple of thousand bidders because everyone would love to have this kind of property in their portfolio. So you trying to find the best locations, the most popular ones and you trying to build the highest portfolio possible.

Yeah, right, right, yeah. Fantastic. Do you want to talk about your other games or are these all combined into one now or.

Well, the other games are not related to to real estate, but they are related to gamifying big data, I can tell you that. Weather Challenge, this game will be launched in early November this year and where you place bet and you predict future weather. And this is connected directly to Weather channel and it will include well known TV celebrities from weather presenters. You will be able to play against your friends, weather presenters and the mother Nature.

Fascinating. And what's the other one?

It's the Speculate. Speculate is the game which actually connects all brands from Facebook and Twitter and you can buy them in stock market. And every day there's a different engagement by these brands. So some of them are going higher, some of them are going down. So you have the real simulation of the stock market and it's all with social media.

You know what's so interesting? I mean listeners, it is an amazing time to be alive. The idea of crowdsourcing so many things from real estate investing to weather forecasting to you know, for example the app called Waze which is a Navigational app. Most of the really sort of professional or experienced drivers like the best. They like it better than Google or Apple Maps. You know, it crowdsources what's going on with traffic where there are speed traps and cops and things like that. And you have ways in Europe. Right. It's global. Yeah. Google bought it years ago is my understanding. But I'm kind of wondering why they haven't combined it with Google Maps. Because it really is a better system and the power of crowdsourcing is just amazing. It really is. You seem to be a big fan of that, John, in terms of business models around which you've built these games.

Absolutely. I mean, I came up with this idea after I sold my last apartment from my real estate business. And I said no more traditional business because it's slow, because it's unpredictable. Now is the time to go for it projects because they have the biggest chance to scale. Because still when you're in traditional business, you have let's say 100,000, 1 million or a couple of million. You still the scaling this money to the next level takes ages and actually years. If you have a concept that can be used by others, can be that people will love it, then you can scale in next few days. Now is the example of Pokemon Go. You have the millions of players just in US it was launched a week ago. You can really start the business very quickly. You can, of course there's a huge competition, but the idea and execution counts and you can still, you can be a millionaire in about a week.

This is the thing though, everybody learned the lesson in the dot com boom and bust of 1999, 2000, 2001. And the lesson they learned was this. All of this venture capital and all of this stock market money, it all flowed toward these startups. And I had friends doing some of the craziest startups you could possibly imagine. They were just inane, stupid ideas. Now it's not that stupid this time around. This time around, it seems like we really have evolved. But John, and to all our listeners, the famous last words of any investor is this time it's different. So we all need to constantly remember that phrase because in the most fundamental analysis, it's never really different. But there are different nuances, of course. And what I want to say about that is everybody thought, well, the Internet, it's so incredible because it's so scalable, you can reach the whole world. The whole world is your potential customer. And they're absolutely right. But here's what they didn't realize in the last time around 15 years ago is they didn't realize that the whole world may be your customer because you can reach them all now, but the whole world is also your competitor. And so that's what happens. So there's massive amount of scale available to the best ideas and the most well funded ideas. Of course, the best ideas don't always win. Sometimes it's just lucky break. I'd rather be lucky than good any day. But it's just fascinating. I mean, I love the sharing economy models and the crowdsourcing models. And I just want to ask you, as a technology guy, where do you see the world going with this stuff? I'm constantly telling my audience my saying it's an amazing time to be alive and it really is an incredible, incredible time. Our ancestors have been working toward forever. Of course. Where do you see this going? Like what's maybe the next iteration of some of this stuff? Maybe in your own business or just in general, whatever you want to share.

Don't invest in startups, invest in companies which are generating traction. But where the words go, well, I see simply that we are at the beginning of not understanding things which are going around us and we are becoming fed up with everything. So in about 10 to 15 years I see that we will actually put to the dustbin all of the devices, wearables and everything what is all around us and we will come back and start from the scratch.

What does that mean? I'm not sure I get that. That's interesting.

Start from the scratch. Well, piece of paper and a pencil. Because it will be too much. It will be too much. This is of course the reasonable way. And the other way will be downloading the oldest data into your mind and taking advantage of that. So you'll have actually the world will be divided between people who can aff education and these devices and rest who will use that.

Well, just to comment on that though, you know, I see that there's definitely a digital divide, but the democratization that technology is bringing is incredible at the same time because these devices and the software that accompanies them is so much easier to use than it's ever been. I mean, years ago I remember sitting in computer classes and learning Lotus 1, 2, 3. You probably don't even know what that is. Oh, maybe you do. Okay. I don't know how old you are, but you know, and it was so hard to learn and you had to take so many classes nowadays, really hardly anyone even teaches software anymore. You just use it, you just start using it. And that's how you learn it. And it's also becoming so incredibly inexpensive. I mean, back in the day when I bought Lotus 1, 2, 3, it cost 6 or $700. You adjust that for inflation and that's probably the equivalent of two or three thousand dollars even today. I'm not sure. I'm just. That's off the top of my head. And the amount of training you needed for that. The software people used to say that for every dollar you spend on software, you need to spend 35 cents on training your employees and yourself. You know, it's about a third. That was the ratio. Now it's virtually nothing. I mean, you can subscribe to lynda.com for, I don't know, 30 bucks a month and learn all you ever need to know about any software in the world, pretty much. Or just get it on YouTube for free. And the devices are so cheap. I mean, you look at these developing countries in Africa, for example, or anywhere in the world, and they're using smartphones and they have better cellular networks than we have in the US in many ways because they're newer. They got them more recently. It's truly incredible. It really is. And people like you are on the forefront a lot of this stuff. So it's fascinating, isn't it?

Actually, I can tell you that we have also, I mean, the business model where we are in, it's actually amazing because it's free to play. It means that we give our product for free. And 95% of our players are playing for free. So we cover for the service for everything. But this 5%, this 5% is from the society. They need to have some adrenaline. They need to spend money to get the faster. They need to accelerate the growth by using money. So, for example, our biggest spender is one famous baseball player. I can't tell the name. He's from us. And he spent over $18,000 buying, basically.

Buying what? Credits so he could buy more real estate.

Yes, that's right.

How interesting. It's like a form of gambling almost, but it's not really gambling. Why would he spend $18,000 on these credits? What does he really get for it?

Well, he is still not number one. The number one and two are two guys who started at the beginning and they didn't spend any dollar. Wow. Yeah. So this is not pay to win.

Game, that's for sure, but it's pay to advance. And it's just so reminiscent of programs like Second Life, which has been around for a while, which. It blows my mind, John, that people would spend all this time and money in second life creating this virtual world in which they live. And I think that trend is only going to increase with the advent of virtual reality. That another example of something that is just becoming so cheap and it's coming down to the masses. You look at Oculus Rift nowadays and I don't know what those goggles cost. I think Samsung has a competing product for 150, 200 bucks or something. Google of course has just a cardboard goggles. You put your phone in it. I actually got those for free at a Google store once. It's incredible. I mean this is just a huge like listeners. Let me just make something clear. I don't play games. I don't play any games. But I read Jane McMonagle or McGonagall's book. She's got a couple TED speeches called Reality is Broken years ago and it was one of the most fascinating books I've ever, ever completed. I mean it's just phenomenal. This is a big deal. Do not underestimate it. So I'm sure you'll have some comments on that. John.

Basically we have still come back to the world to say that the world is divided between people who actually are players, gamer people who use the content, who actually would like to be involved in this virtual reality and creators of course. For the creators is an amazing opportunity to be very quickly worldwide. You know, when you publish an app, you can be in 140 countries just in one hour. This is amazing. You cannot compare this to any traditional business. From the user perspective, you have a lot of choices and actually the technology is helping you to entertain yourself, to learn actually all sorts of things. But still you will be choosing the easiest way to entertain yourself. So you will be spending more time. Of course now users are spending more time in front of television, but it will be more difficult if they will be spending more time than in normal daylight, which is like the eight hours. This is what I have seen in Second Life that people are actually more connected to the virtual reality than reality where they mostly sleep and do the necessary things.

Truly amazing. Just out of curiosity, and I know I touched on this before and we'll wrap it up here, but with your game, do people actually have a social component that they could take offline? Will these people ever meet each other, for example, or is there a real social networking element to it?

Yes, they have created few secret groups and forums where they share the information actually how to hack the system. So what they have discovered glitches and this kind of information but you know, it's in Landlord. The most important thing is what is your valuation, what is your total empire value? And this counts. So the players are giving some advice to the younger ones. There is a community, very interesting that in some countries, you know, like I mentioned Belgium before, our game is becoming some days more popular than Tinder and Facebook by number of downloads. In Portugal, we were number two up for three days overall. You know, so there are places where it can be like that. But still it's all about making money. It's fun because we are making virtual money.

Very interesting. Give out your website, tell people where they can find out more.

Please go to wearealitygames.com and if you would like to download Landlord, you can do it on iOS and Android. It's ready for all devices.

Okay, and let me just make sure that domain name is clear. It's wearealitygames.com.

That'S right.

Fantastic. John, thank you so much for joining us today.

Thank you, Jason.

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