Why Compass?

Industries are changing. They all are. Right before our eyes.

Web 3.0 is morphing and emerging more and more everyday and that will only continue. Technology will never replace humans, their roles just change. Adapt or die. Pretty much the name of the game since the beginning of time.

It has yet to be seen how it will all shake out across industries, but real estate is no different. In general, humans don’t like change and can easily freak out because of the fear of the unknown—how will this affect me? In what ways will I be required to change, especially where I don’t want to or don't know how? What skills will I need to acquire in order to still provide for my family and future?

Often, movements or ideas that are misunderstood or foreign to us get branded as “evil.” Don’t get me wrong, there absolutely is evil out there worth avoiding, but more times than not, if we investigate further and do some basic critical thinking, we’ll find new things coming on the scene often aren’t “evil” but perhaps just different or maybe even revolutionary for everyone in a good way. Can you imagine the chatter during the Industrial Revolution? Oh to be a fly on the wall!

In my real estate business, several years ago I could really sense a major shift on the horizon. I felt strongly that if I didn’t want my real estate business to go the way of the Blackberry (a great run, no doubt, but those people are off doing other things with Blackberries in keepsake boxes and museums), then I 'd better get into the flow of the disruption happening within in the industry and figure out how to make myself indispensable. I started really wrestling with things: How can I do that? What do I have available to me to execute on that? How can I properly utilize tools available to me in my area, but not sacrifice on the red carpet, white glove service to my clients that I love so much?

Discount brokers had already been on the scene for a while and that model definitely makes sense for a section of the market. But it was also clear that there was always going to be a section of the market who wanted more expertise and service than their model provided. 

When you evaluate the discount broker model, like Redfin, for an agent, it's definitely interesting. A salary has some really nice benefits, but the roles are different in a model like that. For instance, one person schedules and that's primarily all they do. One person shows, another person negotiates, another person does paperwork. For my area and my personality, that model wasn’t ideal–I like it all and for me to properly protect my clients’ interests I need my hands on every part of the deal. It no doubt has a place, but as I evaluated the model for my area and my needs, it wasn't a fit.

I grew up in a very small town area of Dallas and still live and work in the same area more or less. Everyone knows everyone, especially in the real estate world. I will never forget when Compass came to town. Oh my. The whole town was abuzz. People were freaking out. Depending on who you were talking to they were either pure evil coming in the form of out-of-touch-big-New York—nasty and arrogant ivy league wall street people trying to take over our nice little small town or they were just another brokerage, likely to peter out over time--oh, they'll never make it here [Hint: my personal experience has been FAR from either of those poles.]. Looking back, I really get a good chuckle at some of the narratives circulating and the ghastly responses when someone new would announce they were joining Compass. [Insert TV show full audience gasp tract].  

I’ve never been much for gossip or a grapeviner. My friends and family can attest to that, so I just kept my head down and worked my tail off. I enjoy working and having grown up in the area, I knew the different positions people take on perceived-scandalous-situations, which often work themselves out over time. Ninety five percent of the time, they end up not being that big of a deal to begin with.

My town tends to be very social. It’s DALLAS for Pete’s sake. While I was trained very well in the Dallas social scene by one of the very best (ahem, my mother), for the most part it just isn’t my bag. I’m more introverted with a business mind and sensibilities so if my business was going to work long term, it couldn’t rely too heavily on the social scene—that wears my butt out and isn’t sustainable for me long term. I enjoy it in bits, but it cannot be the bulk of my business practices. I want to have some bandwidth left for my family, so I had to take best practices from my stellar mentors and mold my own way.

My husband is in technology and I had helped him run his technology solutions company for a few years, so I knew enough to be dangerous in the technical world. He’s an open source guy and big on not reinventing the wheel but making use of proper technology already available and plug it all into each other for a more comprehensive solution. Then, once you’re off and running, write your own code because that takes considerably longer, but then it’s original and exactly what you want. All enterprise level software is custom code—that’s where the value is. When you’re the one building this stuff from scratch, it doesn’t make a whole lot of sense to build your own wheel if you can go buy one off the shelf, especially if time is of the essence. That approach just makes good sense. Because you can flesh out true requirements with users and their feedback, refine along the way based on real time data, and simultaneously write original code and roll that out over time. Then you’re phasing out cost centers and phasing in original assets. 

Because I had my own in-house IT department who has to face me daily, I was already utilizing a lot of good technology at my former brokerage in order to streamline things and systematize as much as possible. Carpool starts at 3:00 pm so I have 7 hours to get stuff done and then Mom-duty starts so I have to be as efficient as possible with my time and energy. As my business grew, those systems weren’t integrated and couldn’t be integrated so I was getting into double and triple entry and that just wasn’t a good use of my time. Not to mention paying individually for these systems in addition to all the dues and marketing we pay for. Needless to say, my overhead was very high.

Enter a phone call from Compass. I had been avoiding this call and one day, I wasn’t paying attention and I accidentally answered. I thought, “Oh crap. What do I do?” All I could do was listen. So I did. “Wait, aren’t these guys evil? He doesn’t sound evil. He sounds like a doll. And what I’m hearing makes good sense.” I agreed to meet with them and called my manager the second I hung up. My former manager is one of my favorite people and he was so professional and wise and said, “Kelli. This is business. You need to hear them out.” A response that I will forever love and respect him for.

I went into the meeting pretty cold and guarded, planning NOT to even remotely consider it. I was happy where I was. But what I saw, I couldn’t deny. Again, it’s helpful that I live with a mechanical engineer and enterprise level software architect. Daily, I get a behind the scenes look at what is required, in terms of time, energy, effort, and focus to build quality software that is forward thinking and ready for the future so that it’s not obsolete the second you roll it out—wow, what a feat—and it has to be someone’s full time job to analyze what’s coming down the pike, chart the path, stay focused on the plan, yet be flexible enough to adjust on the fly without sacrificing on building deep, lasting roots. I do NOT have time to do that as much as I enjoy it. I’m selling houses and raising a child. 

When I saw the backend and heard the forecasted technical road map, I instantly knew Compass was 10 years ahead of everyone. And that gap will accelerate over time. Well crap. I had a decision to make that I did NOT want to make. Big-girl-britches-time as they say in the south.

Once I saw the inside, I knew that Compass would not have to use the model of attracting top agents with big incentives for much longer. I knew that would be phased out because the support they provide to a group of people who are often drinking the sand was too important and valuable. I knew my time was now or never. 

Compass is the only technical company that recognized the gap in the market, serving the largest and possibly hardest working entrepreneurial group on the planet: real estate agents.

Real estate agents are sole proprietors and essentially contractors. We pay all our own taxes and overhead. We work 24-7, nights, weekends, holidays, and often sacrifice a lot of time away from our family. No one is looking over our shoulders making sure we are getting the work done—we have to hustle hard to make it and we eat what we kill–full commission work that is paid by the consumer. We are small business owners with continuing education requirements. We are the CEO, janitor, strategist, customer service, HR, admin, compliance guru, scheduler, stager, counselor, mailman, you name it–it’s a hat we wear and not all of them are terribly cute or comfortable—but the good ones put on the necessary hat and gett-er-dun.  

There is a big difference between being a sole proprietor as a real estate agent and being a brokerage. Making a profitable model in the real estate brokerage business is very difficult. Why? Because if you have high producing agents, then they require a very high split, which means less for the “house.” Therefore, if you are going to do what has never been done before for real estate agents--as in offer support and resources that no one else offers, then you have to have an out of the box model to sustain it and you cannot rely on agent production. Yes, that helps and it is a piece of the puzzle, but there has to be an outside source of funding. I have been very impressed with the Compass model.

While many discount brokers came on the scene utilizing technology in a way that seeks to render a professional largely unnecessary or irrelevant, Compass took the opposite approach. They recognized that the market is large enough to handle both discount brokers and high service brokers. Yet the high service brokers will be required to combine proper technology with the human element to stay relevant and useful as we head into the future. There is always going to be a portion of the market who wants a professional on their side and can compensate for it and there’s always going to be a portion of the market who wants to pay a flat fee. There’s a place for both and everything in between. It’s the difference between Flea Markets, Walmart, Target, Neiman Marcus, and Bespoke. There are people who shop in every single one of those categories and those who routinely shop in only one! That’s precisely the idea of a free market—people are free to make the decision that makes the most sense for them at that time of entering the market depending on a variety of factors including life stage, financial position, timing needs, expertise, and so forth. The invention of E*Trade and others like it did not send financial advisors into extinction—it made them more important. Sure, I can go personally buy some shares of Amazon or Apple or something, but if I really want to have a long term strategy and plan that maximizes my profits, I’m going to have a trusted advisor by my side that is in the trenches everyday. That’s what good real estate agents are—long term advisors, strategists, and partners.

As I dug deeper, did hours and hours of research into the different business models, I accepted Compass's offer to join them. It was one of the hardest decisions I've ever had to make. Into the future we go!

So now having been at Compass for five years, what is my assessment?  More on that to come….Here’s a teaser: what they are building is incredible and I’m proud to be a part of it.