Simon Chen, CEO of ERA Real Estate talks with editor-in-chief, Tracey Velt about what drives ERA Real Estate to succeed as well as insights about the industry and its future.
Listen or read the full podcast interview below.
This is Tracey Velt, editor and publisher for REAL Trends. We're interviewing extraordinary real estate leaders to get a glimpse of what drives them to achieve as well as have them share insights about the industry and its future. Today, we're speaking with Simon Chen, CEO of ERA Real Estate. I've been following you on social media, and I think you have a really fun social media presence, so thank you for that.
So you saw the 200 people that liked my comment about "come to ERA, we have cupcakes?"
Yes, I did. I loved it.
So let’s start at the beginning. Successful leaders, they all had to start somewhere. Tell me how you got into real estate and eventually came to ERA.
Sure. So I started out my career in investment banking and technology, but any time I could scrape together a couple bucks, I was investing in real estate since my parents sort of instilled in me that that's the best way to build personal wealth. Eventually, I ended up in the whole dot-com bubble, and when it burst, I said to myself, "My next business is going to have assets that I can physically touch," and so I started a real estate brokerage about 16 years ago in Los Angeles and San Francisco. To be honest, the whole time that I was at my own brokerage, I was frustrated by the state of technology and innovation in our industry. Eventually, I headed over to realtor.com/move to try to sort of wield the bigger sword, if you will, and then ultimately ended up here at ERA where we have the biggest sword in the building on behalf of Realogy by being the largest real estate company in the world. That's where it's really exciting.
My greatest fear for the industry as a whole is that kind of like the dot-com bubble, the only people that are going to benefit from this boom that's going on with some of these "disruptors" in the industry are going to be the VCs again, and that we as agents or brokers are just going to end up on the side of the road with egg on our face if and when the bubble bursts. To me, having been through that experience in the dot-com generation is sort of frustrating.
Yes, so let's piggy-back on that. There are a lot of challenges in the industry. Markets and technology change quickly; we have a lot of disruptors coming in. I see a lot of block chain-based companies coming in as well. Tell me, what do you see as the most challenging part of that as it relates to a network like ERA?
Yeah, I think it's preconceived notions. For example, when I was being recruited for this role, I thought, "ERA, I don't know a lot about them but I know that they're one of the older Realogy brands." The perception for me as an aggressive entrepreneur is, is that too old of a brand? Are they too firmly stuck in the mud, basically, to do anything and grow and innovate? My greatest fear was coming into ERA as part of Realogy that somebody would come along to me and say, "Well we're a big ship, it takes a lot of ocean to steer us" or something that would make me crazy along those lines. I'm happy to find that it's the exact opposite; it's sort of like, what if the 800-pound gorilla woke up one morning and was suddenly smart and angry? What could it do with all that energy, resources, dollars in order to innovate in the industry? For us, I think my greatest frustration is getting stuff done as fast as I would like to get it done, but there's an awful lot of empowerment here, as well as just reintroducing the industry to what ERA's all about. I didn't know that ERA stood for "Electronic Realty Associates," and I find that really charming.
I think that our culture of collaboration, innovation, global diversity since we were the first franchiser to go international, is exactly what the marketplace needs these days instead of some of these hype, to be perfectly honest, that's out there right now. It's the substance that will really build our agent's businesses and make them successful in the industry that I feel like the industry needs the most.
Okay, so what real estate related technology are you really excited about?
So for me, what I call "shifting the bell curve." If you can make the average agent perform like the highest-performing agent or make the lower-performing agents perform like the average agent, so you sort of shift the whole bell curve to the right, then the implications for the agents and the brokers are profound because our costs are already sunk. Our effort is already invested. If you can be more productive as an agent, the profitability, as I call it, basically it's just pure gravy. What we're doing is taking those best practices and codifying them, building them into the system so that, for example, for an agent, if you want to make say $100,000, in your market that might mean that you need to close say 10 deals. If you need to close 10 deals, maybe you need to be in escrow for 12, and if you need to be in escrow for 12, maybe you need to have 24 clients or something like that that you're working for. In order to get 24 clients, maybe you need to do 100 listing presentations. In order to get to 100 listing presentations, maybe you need to meet a thousand people, right?
So every single day that you wake up, you can see in our leverage, which is our ExtraNet system, whether you're on or off-pace to hit you're $100,000 based on what you need to accomplish each and every day in order to hit your goal. Let's say, for example, if you're supposed to meet a hundred people a day or contact a hundred people a day, or what have you, we're starting to see that your conversion rates aren't what they need to be. Maybe you need to meet 120 people a day or something along those lines. I think it's really important for us to work with our agents to help them understand exactly where they are relative to their goal for the year, every single point in the day, every single day of the week, every single day of the year so that they can hit their goal and not be surprised at the end of the year saying, "Oh, well I made my $100,000" or, "I missed my $100,000," or, "I exceeded it." A lot of time, it's almost cryptic for a lot of our agents.
We talked about your social media presence, and you have a background in tech, so how does that benefit you in your current position?
I think it fills in gaps in my personality. I've always been really bad at keeping in touch with people, right? I've always said, "Don't view it as 'I don't care about you,' just view it as 'I'm really bad at keeping in touch with people.'" Things like LinkedIn and Facebook are fantastic because they fill in that gap in my personality. They help me keep in touch with people, connect with, for example, people like you, right? Express my personality, see their personalities without having to do it as proactively as obviously I'm not prone to do. If you meet me in person, I typically don't take business cards; I just tell you to add me.
Because the business card's just going to go in my pocket and then it's probably going to go in the trash before I leave the hotel room.
I think that's really important. We should really leverage the power of social media, and we've seen our agents and our brokers find that social media ends up being some of their most effective marketing as opposed to other channels, and I think that's a great lesson that all of us can learn.
Definitely, It's a way to show your personality.
So what was your "aha" moment in business or in your personal life? The moment you realized, "Oh, I need to change something or take it to the next level or reboot?"
You know, that's a good question. I think the "aha" moment for me was when I was sitting at my own brokerage and spending mightily on investing in technology and spending mightily on investing in learning, and then because I was the broker owner, then I had to deploy them. Then I had to be the resource that people came to in order to walk them through it or coach them or train them, what have you. I think the "aha" moment for me was realizing that I was my own rate-limiting factor, and that if you do wield a bigger sword, you can get a lot more done. That's why ultimately I went to realtor.com/move and then ultimately ended up here. It's just that ability to be able to leverage the combined resources of all of Realogy in order to get what we want to get done here at ERA, and we are very much empowered to do so. That's really exciting to me.
Real estate is all about building relationships, so I'm sure along the way, you've had some interesting and inspiring connections. Tell me about some of the people who really inspired you or changed your perspective, or impacted you in some way.
Yeah, I think it's timely because I just had my first call with my mentor yesterday. My mentor is actually Alex Perriello who used to be the former CEO and President of the Realogy franchise group, amongst other roles. I have an awful lot of respect for Alex, and I'd actually never really spent a lot of time with him because I literally came into the building on his last day. We didn't even cross each other in passing as I was coming into the building, so I'm really honored and privileged to have him as my mentor now because he drove things like, we have this program called Forward. I don't know if you're aware, but it's sort of our incubator, our think tank for technology companies. Once a year, can't remember, it's around October/November timeframe but don't quote me on that, we have 15 startups come in and present to us as well as a group of our brokers, as well as our technologists and everything, and say, "What are the cool things that you're building? How can they really disrupt the industry and/or complement the industry so profoundly that it really moves the needle?" That's what we're looking for. It's like a Shark Tank; they get up and they do their presentations and everything.
Then the one that wins, we give them $50,000 as well as integrate them into our technology stack, which is Zap. An incredibly forward-thinking, no pun intended, initiative that Alex originated. Then the other one is a program that we have called Ascend.
We try to have a lot of Chinese walls, I can say that by the way, in the building because we have these different brands and we want to foster productive co-opetition but not get in each other's ways. Ascend's one of those areas where we sort of knock down the Chinese walls and we have brokers from all different brands coming and attending and learning with each other. The purpose of the program is basically to help brokers identify and then train up their succession plan. It's an almost year-long program with weekly updates where the next generation of brokers learn what and how to be the most effective broker leveraging the collective experience of not just the building, which is substantial, but the entire industry. Because of our mass, we can really bring in the best and the brightest from the industry, and that's really exciting to me.
Yeah, that's an incredible program. It really is.
Let’s shift gears a little bit and talk about your life outside of real estate. What childhood or teenage experience shaped the person you are today? We're going deep thinking here.
I probably can't talk about the teenage experiences because I'm not sure my parents even know about them now, but I would say that I've always sort of had an urge to go faster. Anything with a motor has always intrigued me because it allowed me to go faster, so whether it's planes, trains, motorcycles, or what have you, I'm really into them. I would say a good example of my childhood was, I was born and raised outside of Washington DC. We had a fair amount of land because land is relatively cheap on the east coast, relative to California, and so we bought a riding lawnmower. Then my next door neighbor owned a car dealership, and so he was very into cars and everything, and so they had a lawnmowers, and our properties were adjoining each other. We ended up mowing our own lawns and then seeing each other, and then racing each other across both of our lawns. True to form, both of us went back and modified our lawnmowers to go even faster, and so it actually got sort of ridiculous because we were racing lawnmowers basically using both of our lawns as a racetrack, which was an awful lot of fun.
I think that's an example of just "let's do it, but then let's kick it up a notch" basically to do it with a little bit more fun and enjoyment.
It sounds like that translates into what you do at work as well, with your job at ERA.
Yeah, it's just sort of, "How do I kick up the level, think more entrepreneurial?" I'll give you an example: so when I joined "The Building," as we call it, I have a U-shaped desk. On one side of the U-shaped desk is my phone, and on the other side of the U-shaped desk is where people come in and sit down. If I'm having a conference call, it doesn't work because the conference phone is on the wrong side of the desk, and so nobody can hear each other. I called downstairs, because we're a big company, and I said, "Hey, can I get a speakerphone?" They said, "Sure. It'll be $2,000. We're going to run a bunch of wires and it'll take about a month," none of which sounded good to me. If you see my office, I don't like wires all over the place. I, of course, got on Amazon because we're Amazon Smile Mom Prime, right, and found a JABRA Bluetooth speakerphone that's super handy. $107, shows up the next day, and we're in business.
I mean, it works, it's right there. That's the mentality, is like, "Let's get out of our own way. Let's not just do things the way we've done them just because that's the way we have for years and years. Let's get back to our entrepreneurial roots."
You sound like you're a little bit of a daredevil, so tell me a little bit about your hobbies and passions outside of real estate, and how do you stay involved in your community as well.
Sure. Yeah, Sue, my predecessor here, always liked to say that I was that guy in the beer commercials that's like the most interesting man in the world. I do hobbies until I can do them at a reasonably high level, but I'm not actually good at any of them. I think what's neat about our brand is that there are two classically trained chefs in our senior leadership team, myself and Don Perry, who's our head of marketing. Obviously I'm really into cooking as well as eating.
I like scuba diving a lot. My wife and I do a lot of scuba diving as well as just travel, and then like I said, anything with a motor, I'm probably inexplicably drawn to.
That's how I stay involved in the community, is that I'm members of these various clubs and I stay pretty active in them. That's actually how I grew my business, because if you're all into cooking, then be the realtor in the room just like there's a doctor, there's a lawyer in the room too that just have this hobby that tie us together, and that's how I generated all of my business for the most part, is just being the realtor. If they had a question about anything real estate-related, I was the one they talked to, just like if you had anything medically related, you talk to the doctor guy, and when you had anything legal-related, you talk to the lawyer gal.
Right, right. Absolutely. Don’t be a secret agent.
What motivates you every day? What gets you up and gets you going?
I think it's definitely family for me. I'm married and I have a daughter who's three, and just every morning, waking up and just wanting to provide a good life for her, and to be honest, I'd sort of gotten a little bit complacent when I was single because it was just me and I don't need a lot, right?
Wanting to be able to provide for them and letting them experience the most out of life, and if I'm able to help to provide that for them, whether it's monetary or being there or what have you, is really important to me. For example, I'm on the road a lot, obviously, given my role. "The girls," as I call them, my wife and my daughter, tend to use those times instead of sitting at home in the house to go and travel, right?
I love that that's an option for them, that they can just go and say, "Hey, Daddy's going to be gone this week, so we're going to go to Disney World, or we're going to go wherever." I think that's great.
I feel like I'm being a good daddy by doing that.
What do you feel you do best and how do you incorporate that into your business?
I think it's focus or time-blocking, as is sort of the practical approach. If you read any of those books like "7 Habits" or what have you, everybody tends to get caught up in their own whirlwind. I tend to block out time on my calendar for things that I need to get done, and then when "the whirlwind" takes over my calendar and I'm doing stuff that I hadn't planned on doing, I'll actually put that in my calendar. Like I'll say "this meeting interfered with this block that I was trying to get things in" so that I can sort of, post-mortem, go back over my day at the end of each day and say, "What did I get done? What was I trying to get done, and what got in the way? What can I do about removing those obstacles tomorrow so that they don't get in the way?" That's really important to me. What do they say? "The definition of insanity is asking a question and expecting a different answer when it's always the same thing over and over again?"
If you don't improve your process or how you get your work done, then you're sort of prone to repeating those failures again tomorrow. I take a very active role in my own calendar to try to prevent that, but it's focus, and then just being able to block out the time and the thought to get things done when you really need to get them done.
Yeah, that's so important. I suffer from that, and I do time block as well, so I understand. It sounds like you're bringing a lot of new energy to ERA, and I'm really excited about the possibilities for the brand.
If you could accomplish one thing this year, what would it be?
Well I think I just did it by what you just said there. I want ERA to not be the best-kept secret in the industry. On Facebook yesterday, there was a guy that posted something on my page congratulating me or what have you, and I said, "Thank you, but I just looked at your profile and you don't have anything about you being an agent or anything about you being affiliated with ERA, so help me have ERA not be the best-kept secret in the industry." He wrote back this morning, he said, "Thank you, I will," and I'll have to check his profile, but it's that "secret agent" comment that you made. This is a noble profession helping people acquire and maintain the largest capital investment in most people's lives with all of the complexities that come with that. People should be loud and proud about it, and in the very least, I want them to be loud and proud of doing it at ERA, and so I want industry presences like yourself and like the other magazines and thought leaders in the industry to go, "Wow, look at ERA," and take great pride in our success. Not because we paid for the press or whatever, but because they'd heard about it, they're feeling the vibe, they're seeing the energy, they're seeing the successes, and they're like, "That's what we want to emulate."
To wrap up, we're going to end on something fun. What are three things you can't live without, and it can't be family, friends, or your phone?
Oh, okay. Well that's okay because I'm not a big phone person, even though I'm obviously linked to it. I would say my Kindle, like that's my security blanket. I carry that thing everywhere, and any time I can, I read, which I like a lot. My passport, because we love to travel and we love to go back through the pages and it brings back fond memories. For me, I started doing it when I was in investment banking because it brought me peace, but scuba diving, so my dive gear because you're weightless, it's quiet. You're looking at a different world. It's sort of technical, so you have to think as well. It's always been just a great hobby of mine, so the ideal trip is obviously traveling somewhere with my Kindle, reading, doing some diving, and if I could add a fourth, I would say there's probably some wine involved.
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