[ 00:00:13,460 ]Welcome to Behind the Bottom Line Podcast. I’m Adam Hayes, joined to my left by my co-host, Bob Payton, bobpayton. com. And across the table from us is Chris Lucas with Shaker. Welcome, Chris. Welcome. Yeah, thank you for having me. I appreciate it. Yeah. So tell us about Shaker. Yeah. So Shaker, we are a real estate transaction management platform. So in the simplest way, we are—mouthful. Yeah. We are Monday or a Sunday, or Trello for the real estate transaction process. And so we work with realtors to do a lot of the task management, automation of communication during the transaction. experience. Right. And so we’re helping them kind of organize the whole process because there’s a million things that people don’t really understand that go on during the transaction experience.

 

[ 00:00:58,820 ]And so we help them kind of make sure that everything is getting done. But the flip side of that is we also have a client portal where clients are able to see a timeline view, their documents. If I’m a realtor and I assign you, ‘Hey, we need the HOA docs delivered before closing,’ I can assign you a task and you can see that in the client portal. They can click that off and it’s done. And then there’s a vendor section where they can see, like, mortgage or inspection companies or whatever. And so, really, kind of bringing the agent experience to better process management and then giving the clients a better view. So the idea is that an agent can have a streamlined process that makes it super easy for their client.

 

[ 00:01:41,920 ]And for them. Yeah, and for them. And then hopefully, that client wants to work with that agent more and more because they had a really good experience. Because typically, as we know, that buying and selling of a house, that process— if you’re the client—can be quite complicated. Yeah. Tends to suck. Yeah, it’s not something we do every day. Right. As consumers of real estate, it’s not something we typically do every day. So, is it for commercial realtors, or is it for resident realtors, or both? So, residential realtors. We work with them. If you think about, there’s the big brands, like Keller Williams, talk to Tuckers, we work with teams within that. So, there may be. We all shout out my realtor, Laura Turner, Laura Turner Group. She has five or six agents.

 

[ 00:02:21,280 ]And so we’re selling to the Laura Turner’s, and then a lot of independent brokerages. As well, okay, so it would be the broker that you’re you’re marketing your services to. Yeah, team leader, broker owner. Okay, yeah, that makes sense. So, kind of tell us what’s happening now, underneath the broker, dealer, with all the individual agents, and what are they doing now, and where the the gap that your product fills for them. Yeah, so right now, the issue is that I think the average number of tools is that the agent or broker uses about 12 to 15 tools. Wow. And that’s everything from CRM to back office to tech lists. And you know, there’s a lot of point solution. So we’re really trying to note on there. You’ve got a big whiteboard there.

 

[ 00:03:05,320 ]You don’t know how many times I’ve walked into a real estate office and they literally You have basically a Kanban board written in marker about each stage and what’s happening and which deals are at which stage, right? Wow. So it forces them to be inside the office. Yeah, well, yeah, or at least they have to have some other way of tracking it. Right. And so what we’re trying to do is just trying to simplify the process and have document storage and have emails and reminders, all that kind of thing in one platform. And obviously, as we grow, we’ll add more to that and do a lot more that will help build out that end-to-end piece. So how does one become aware that these problems exist? That’s where I was going.

 

[ 00:03:47,350 ]So funny enough. So we were actually launched out of high alpha studio here. And, um, so. We can get into this in May. We were actually going to start another company. But this company was started, there was a realtor who had tried to put together, because he was using so many tools, he tried to kind of duct tape with Infusionsoft, which is marketing automation platform. A similar now called Keep Yeah Yeah Yes Um. He had tried to put together a system. He took it to iAlpha. And when we shut down our other company, we took this and kind of went through the validation process and was like, there’s really a need for this. Unfortunately, we launched in the middle of COVID. I’ll tell you horror stories about that.

 

[ 00:04:33,120 ]But yeah, so that’s really how the genesis of it started. And then we kind of came in with our software experience and said, ‘Okay, we think we can kind of build something around this.’ Nice. Okay, what kind of traction are you getting? I mean, how long has it been in in service and what do you see happening? Yeah, so we’ve been around for four years now, launching in COVID. Those don’t count. It’s funny because I think we were talking before, right? We launched in COVID, where realtors are getting 10 off offers on a house and above asking price and no contingency. So they don’t need to manage a transaction. Right. Right. And then we had about a year and a half of kind of just steady growth, and we really kind of got traction.

 

[ 00:05:14,470 ]And then all of a sudden, mortgage rates go up to 7%. And the number of transactions is historically down to, you know, about 08, 09 levels. And so now people are like, ‘Well, I don’t have enough transactions.’ So we’ve been able to weather the storm. You know, it’s just a matter of. You know, when you’re in a new market, your new company is facing a lot of legacy systems, it’s hard. But I think one of our compelling points is that we are modern software in a space that has a lot of ugly software out there. And some just non-software, right? It’s just literally paper. Well, paper and then, I mean, there’s still so many on-prem. things like back-end office accounting, right?

 

[ 00:06:00,570 ]One of the biggest players just announced they’re going to the cloud with one of their systems. I’m like, yeah, this is 2024. So we’ve been able to just kind of slowly keep going. And, you know, obviously we’ve wanted to continue to grow. And I think we’ve got a good product. It’s just a matter of kind of keep slogging through this next market and see what happens on the flip side of that. Cool. So where would you say the product is now on the product lifecycle scale, you know, from MVP to where you are today? Where are you at today with that? Yeah, I mean we’re fully baked. I mean we’ve got a pretty robust product. You know, we’ve got SMS that you can send automated text messages three days before closing.

 

[ 00:06:40,520 ]You can get a text message that says, ‘Hey, Here’s your closing. Here’s your location.’ Right. I think for us, where we’ve kind of stalled in the product is the next layer of like functionality. Just because we need a little bit more growth, and trying to get to that next level of customer at the brokerage level to sustain a higher. Know basically your contract value, yeah. So, and can an individual realtor come sign up with this and and be effective, or is it really only effective at the broker level? Yeah, we do have a lot of individual agents, but typically it’s agents that are looking to grow their process and they already are used to having a system. But the team and brokerage level are kind of what it’s built for.

 

[ 00:07:21,760 ]What kind of monthly deal flow would make sense for a brokerage office to consider this? I mean, we have teams that are doing 50 to 100 transactions in a month. We have some that are doing 20, right? Our sweet spot is typically four to five people in a team or kind of 25 plus in an independent broker. Because they’ve got somebody who’s going to manage, who’s set the process, and they’re like, ‘Okay, here’s what the process should look like.’ They’ve got somebody managing the software, things like that, where agents don’t want to be in software. They want somebody to manage it for them. Like salespeople and sales exactly right. So, how much of the time is you know, kind of education or onboarding with uh, you know, a particular customer and getting them you know trained on the system.

 

[ 00:08:08,680 ]I’m like, ‘Hey, here’s from soup to nuts.’ We’re going to take you through and train you, and kind of hold your hand and make sure you’re adopting this into your practice. Right. Yeah. Yeah. Yeah. I mean, it’s it’s funny because a lot of the times we get through demos or things like that and somebody’s like, ‘Holy cow, this is the system that I’ve been looking for!’ Right. And because there’s not a system that sure kind of sits in that spot that we do. Um, but typically, we’ll get somebody up in kind of two to three weeks and then kind of another 30 days of them really kind of running deals through the through the system.

 

[ 00:08:46,750 ]Where we get the better adoption is again, where if somebody has a process and they’re like, ‘I just need.’ You know, ‘I’m growing.’ I’ve got a process already, but I need a way to kind of implement this. And I’ve been doing whiteboards or I’ve been using 10 different other tools. I need it in one platform. They’ve already started to feel the pain of all the other things. You need a unified digital system to automate what they’re doing and try to create a little bit more scale. Well, because a lot of them will have, like, emails in a document that they copy and paste and send out each time they’ve got a checklist that says, ‘Hey, we’ve got to remember to sell out the seller disclosure— your email and copy and paste it, send it out right where we can just set that all up at once.

 

[ 00:09:27,640 ]That email goes out, they’re done. Yeah, so perfect. Yeah, Man, if I was a realtor, I’d be drooling. Right. So is there an arms race right now? Have other companies discovered this gap in the marketplace and they’re trying to fill it? Or are you guys pretty much the only ones occupying that space? Or what’s the landscape look like? Yeah, there are a lot more tools kind of coming in, you know, a lot of time because the lifeblood of any realtor is the number of leads. So a lot of times, um, or historically, the emphasis has been put on CRM systems and then obviously a backend commission accounting type systems. And so we kind of sit in the middle of those.

 

[ 00:10:09,280 ]What we’ve seen is CRMs try to come down the stream, if you will, and fill that middle, which Some can do it, but there’s still CRM heavy, right? There’s still very lead, auto dialers, things like that drip campaigns, which you can kind of transform that into a product like ours, but On the back end, you’ve got accounting software. super ugly, super old, right? Trying to come into the space. So People are kind of coming in. It’s just we’ve been able to do it in a much more user-friendly way than some of these other legacy systems. So is the product set on all three of those sides? So from CRM to deal management to accounting, is your product capable of doing all that?

 

[ 00:10:55,670 ]Or are you still in this central spot that’s really been, the gap is really big, where processing deals, getting deals through in a structured way? So what’s funny is when we started this, my co-founder, uh, Ashley Walsh and Michael Maddox, are two other co-founders, and uh, we both looked at each other and said, ‘We’re not building another you know what CRM’ and Funny enough, we built a CRM because that has to kind of train that power is the transaction piece. Yeah. So we do have a little bit of CRM functionality. We call it contact management, right? Like we’re not a HubSpot or something like that that has full-blown CRM capabilities. But where we do see people using us for CRM is where they’re highly referral-based, and so they don’t have to do a lot of drip campaigns and things like that.

 

[ 00:11:44,220 ]They just need a way to remind themselves to keep in touch with people. There is a point where we will go into the backend because we do commission calculations and, you know, we’ll be able to pass that into accounting software. Right. So. We bleed on both sides, into both sides, if you will. And there’s opportunities. It’s just a matter of sure. Being a four-year-old company, and you know, starting businesses it’s like, okay, how do we go deep enough to get this, and then we know that we have opportunities, and even if you think about the client portal, there’s so much that we could do there from a commercialization side. It’s just, we built it with the idea that we can go a lot of places, but we knew we had to be really deep in this one.

 

[ 00:12:27,300 ]One place to start with. And so we’ve been fortunate that we’ve been focused enough to stay there where we could have gone. Hey, let’s go. Yeah, sure. So, yeah. Yeah. So, do you have APIs at each end that kind of interface with the tool sets? Yeah. So we’re built on APIs and then we can. Uh, integrate. We have Zapier integration, so we can integrate out into CRMs, we can integrate back into the the backend software. So we’re, we’re built to be flexible. Awesome. Yeah. Well, that probably creates some opportunities for unique, uh, you know, channel partnerships as well. Yeah. Okay. But I mean, you talked about, I mean, staying true to your core, but at some point, you know, what do you see happen in the next three to five years?

 

[ 00:13:11,250 ]Right. Is there— One, is there an opportunity to take that same model and apply to another industry as an example that’s in the same situation? We won’t mention any. Right. But I mean, there’s many. Right. So this is your core product. And if it’s working and it’s awesome, that’s good. Any thoughts of applying that exactly same philosophy to something else? Or not. Yeah, so I think the way that I look at this is with the idea that you know— because we’re tied into i always i always look at this and i was with a company called FormStack and we dealt with data management, process, and flow management. I would always tell people that, ‘Don’t mess with people’s data and don’t mess with people’s money And so we need to get tied to the revenue side.

 

[ 00:13:55,760 ]So I think, at that back-end accounting piece, there’s a lot of because we have the transaction information, we can easily feed into, hey, how do we cut commission checks and how do we do these kinds of things? Right. I think the other place for us in broker management is if you think about, you know, we are essentially project management. steroids for real estate transactions there’s opportunities for us to manage more of the process in brokerages so you know most brokerages have marketing teams and their social media calendars and they’re doing other things to promote their agents or their brokerage so we can build it a little bit more broadly where we’re not just doing the transaction piece but if marketing has you know hey we’ve got to put social media posts and we’ve got to do this and we’ve got to do that sounds like project management right so really it’s bringing that project management piece to the brokerage and just kind of building it

 

[ 00:14:48,130 ]in a way that exposes that more than just here’s your house here’s your address here’s the listing price those kind of things right so that’s where we see the opportunity at the brokerage level is hey we can not only manage the transaction but we can also manage a lot of your business processes okay Nice. That’s awesome. So how did you get to Shaker? What’s your journey to this point, right? Long and arduous. Yes. So I have, so I mentioned I was at Formstack. Actually, so I started at Blast Media, which is a PR agency. They actually just got acquired by Pan, so now they’re Blast Pan. Is Kelly still involved? I think he is. An advisor, still okay. Um, but Mindy Werney and Lindsey Groper, they’re you know great friends and dear, dear people who have helped me on my journey.

 

[ 00:15:35,030 ]Um, but I was actually at Blast Media, and then Adele Ono, who started Formstack, was like, ‘Do you want to come work for me?’ I was like, ‘Sure.’ My son had just been born. He was two weeks old, and my ex-wife didn’t realize. Why I wasn’t more scared of that. And I was like, well, yeah. So I was technically employed over to a form that was there for about ten years. Um, did a stint at another company called Sign Up Genius, apparently. I can stay away from the forum space, right? Yeah. Um, went back to last video where I was kind of working on their tech side, their startup PR side. Um, and then joined High Alpha to start a company. And That’s where we had to shut down one company, literally, shut it down.

 

[ 00:16:24,430 ]I don’t know if you remember the Monday or that kind of Monday through Wednesday where COVID kind of shut everything down. I remember being at my kid’s school on Thursday night. They said no school Friday. We started a house renovation on Monday. And. Tore our whole kitchen out, tore our whole first floor out. They said, ‘Oh, by the way, your cabinetmaker just went out of business.’ And we’ve got to shut down your company. I was literally trying to talk to investors trying to get to fund the other company and got a call from pretty much everybody on that Wednesday. And they were like, ‘click click’ we’re we’re pausing for the next 30 to 40 days to see what happens and so we shut that business down and kind of went back into eirs or entrepreneurs and residents and kicked around about 80 ideas and finally came up with this one so yeah so it’s been Yeah.

 

[ 00:17:16,460 ]A fun journey. That was an interesting time. But funny enough, you and I were talking about our common, you know, Carla. Yes. That we both know. That’s actually how I met Carla. Okay. So she worked for a law firm downtown. We were, you know, working on a project, starting to work on a project together. Who’s going to sign, in essence, the contract on Friday. Friday afternoon, what is it? March 10th or whatever the day was. Saturday calls partner calls me up says, all that’s done. Right, we’re doing something else. He’s literally carrying his mother from the nursing home to the hospital. Oh man, right. I mean, it’s just that whole time. That week was really interesting, a time in history, right? Not fun at all. So yeah, it’s an interesting connection.

 

[ 00:17:56,950 ]Yeah, that is that’s funny. Yeah, we’ll talk about it over a beer sometime. So yeah, there was a ton of uncertainty, but I kind of overheard some of your guys’s conversation. So you haven’t lived in Indiana your entire life. So kind of tell us your journey. How did you get to where? Were you and how’d you end up here? Yeah. So I grew up in Wisconsin. Um, I was actually so backing up even more. I was actually adopted from Columbia. South America by parents in Wisconsin, so I went from Uh Bukitamanga to Bogota to Miami to Minneapolis in February in the middle of one of the biggest snowstorms there’s— 24 inches of snow. Is that 78? No, I was adopted in 82. Okay. Yeah, so I lived in Wisconsin as a Columbian.

 

[ 00:18:44,110 ]Well, there’s not a lot of us out there. I’ll tell you that much, especially when I play hockey. So there’s not a lot of Columbia and Wisconsin hockey players. As you know, if you cut the demographics, I’m kind of 1% there. Did you ever get used to the beer and cheese diet? Oh, God, yes. I’m more Wisconsin than I am Hispanic. I’ll tell you that much. He hasn’t said that to me yet. Thank you. No A’s. So grew up in Wisconsin, ended up transferring from a small school my freshman year to Purdue. And yes, go. Spoilers. Was at Purdue, graduated, lived out in San Francisco. My ex-wife and I got engaged and she was in Chicago.

 

[ 00:19:26,640 ]I was in San Francisco and we were like, ‘Well, we don’t want to go back to Wisconsin.’ And so we kind of just looked around and we had a lot of friends from Purdue living in the area. chose indie and then, um, I was telling you, like, I get bored and so. We were here for about 10 years and then I was like, ‘Let’s move to Charlotte.’ So we lived in Charlotte for about five years and then we came back here. So it’s, yeah, just like my welcome home. Yeah. So yeah, it kind of been all over both professionally and personally. So that’s cool. So what did you study at Purdue? Yeah. I forgot to ask. I am a communication major.

 

[ 00:20:05,070 ]So I always tell people that I go to Purdue and they’re like, ‘Oh, engineer.’ I’m like, ‘No, I’m not.’ I play one on TV. Yeah. And they’re like, ‘Wait, your CEO would come.’ I’m like, ‘Trust me.’ That’s amazing. You should So, yeah, so I tell people I go to Purdue, I let them think I’m smart, but, you know, I’m not. So it’s all good. Right. So still family, right? We talked about kids and things like that. Yeah. So I have two kids— a junior in high school, sophomore in high school, or, uh, freshman in high school. Um, both at HSE and then, uh, my girlfriend has four children. Um, she her kids go to Carmel. So, oh wow, yeah. So we— You’ve got quite a household when everybody’s there.

 

[ 00:20:48,210 ]After five, your schedule is, I’m sure, you’re trying to figure out the logistics. Between three hockey players, one travel softball player, one dancer. Yeah, we’re kind of all over the place. Hope you have one of those Mercedes-Benz fans, right? It’s 27 people. We need like a family Uber service is what we need. Right. Yeah. So what do you see happening next? What do you see happening for you and the business and those kind of things? What’s kind of the big thing on the horizon? Yeah, I mean, for me, I think it’s, you know, we’re still trying to grow the business and trying to, you know, continue to see how we can develop the products. I think we’re in interesting times right now.

 

[ 00:21:26,760 ]There’s um a big lawsuit that’s happening in the real estate space with uh how agents get paid right and so typically um you know let’s say you’re selling your house— three percent goes to the buyer, three percent goes to the seller’s agent, and well, in this lawsuit, it’s basically said that it’s, what’s the word? There’s a monopolistic approach. Slightly collusive. Yeah, collusive. Hey, why does the seller have to pay that 3%? October or August 17th is like D day for the industry. Um, and so rulings come down and said you know we have to— you have to, as a buyer, you either have to come with cash to pay your agent or you have to have some other agreement in place and so um That along with where the market is, there’s a lot of uncertainty.

 

[ 00:22:24,610 ]I think what we’ll see is probably a reduction of agents. It’s the 20, 80, 20 rule. 20% of the agents make up 80% of the production. And I think you’re going to see a weeding out of a lot of these kinds of transactions. You know, one, two, three, transactions a year. Agents. You’re gonna see a cannibalism—um, we’re also seeing that in the in the space in the tech space around—um, just because there are so many legacy systems that have been out there for 10, 15 years that are just ripe for innovation. Yeah. Yeah. But that also tells me there’s an opportunity for you and your business. Cause I mean, if I’m under the pressure, you know, all of a sudden that expected commission, et cetera, flow changes, then I better get efficient.

 

[ 00:23:15,460 ]Right. Well, and even with our client portal, like one of the things that we want to do is just highlight what agents really do for for their clients. Right. And so there’s a lot of opportunity. So the industry as a whole is just kind of really uncertain. But I think that there’s, I was talking to a mentor of mine, she’s in the space, and you know, the folks who kind of see the opportunities are going to be the ones that survive. And I think that we’ve got a good product. We’ve just got to continue to focus on the right things. But I think the industry as a whole is going to be vastly different. But I think it’s going to be for the betterment.

 

[ 00:23:58,600 ]And I think the agents who really take care of their clients, who have been working their tails off for the last 10, 15 years, are going to be the ones that, you know, still produce and do a really good job for their clients. Yeah, absolutely. So is D-Day? Is that like a certainty or is there a possibility that it may get deferred and those kind of things? Right now, it looks like a certainty. That’s when, you know, The. The law is essentially coming into effect and they’ve got to figure out, okay, what is this buyer agency look like? And we can’t list buyer commission on the MLSs or whatever it may be, right? So that’s where the industry is in a panic and trying to figure out, okay, how are we going to manage this whole piece?

 

[ 00:24:43,850 ]Well, the good news is, you know, people are buying and selling houses, right? Yeah. So there’s going to be an ongoing need. Yeah and I I I was having the same conversation with with her yesterday and I said you know if you take out there’s there’s three things that’s going on there’s this lawsuit that’s going on you’ve got high interest rates you’ve got no inventory I said if you take interest rates which all you know suddenly yesterday was at the lowest that it’s been in like the last 12 months and you take inventory this problem starts to kind of figure itself out and so I think, as market conditions, I think the economy is going to soften a little bit and you’re going to see interest rates come down you’re going to see inventory go back up and I think this piece will kind of write itself and I think.

 

[ 00:25:27,740 ]Again, those producing agents will start to figure out how to sell homes again. It’ll be, it’ll be less dramatic as I think it right now, just because you have so many other forces in the industry. So, yeah. Yeah, I’m one of those situations that, you know, everybody’s talking about where I, you know, I live in a 1970s home. For me to sell that home, my mortgage rate’s so low. Yeah. Compared to today. And then, if I have to replace it, I can’t afford it. And it’s like, you’re stuck. You can’t afford it, but you’re trading. Correct. If you can solve that problem, you’d be in a good situation. Yeah. It’s like there, because there is, there’s just nowhere to go. Yeah. I can’t build houses fast enough because we’re still catching up from 08.

 

[ 00:26:06,160 ]Yeah. Even before then, I think, but I mean, yeah, it’s just all these, to your point, there’s like five factors, all driving things. Yeah, it’s great. I think the last number I saw, I think it was like 45% of homeowners have an interest rate under 3%. Right. Yeah. talking about 6. 5% to 6. 8% or 7%, that’s just nuts. You’ve got a huge population out there that’s not going to trade that right now. And then, when you take the higher interest rate and look at inflation over the last four or five years, then it really scares you. It really disincentivizes people to come off their low mortgage rate and equity positions. Yeah. But again, I think you know. Not to get into the politics of it, but the election coming, right?

 

[ 00:26:56,160 ]I think there’s going to be, and— something’s gonna happen. Right. I think there’s enough softening where you’re gonna start to see that come down, and I think people are gonna start to shift, where maybe they are a little more comfortable, or you know, whatever. So, sure, we’ll see. Change is certain. Yes. All the time. What those changes are. Exactly. We have no idea. Yes. We appreciate you jumping on with us today. It was awesome. Yeah. Thank you for having me. I appreciate it. And how can people find you? Yeah, so Shaker. io is our website. I am not huge on like Twitter, but LinkedIn. I am out there, Chris C. Lucas. And then I don’t know my Twitter, but I’m out there. More. So yeah. Chrissy Lucas on LinkedIn. Shaker. io. Yeah. Shaker. io and Chris at Shaker. io is my email. So. Oh, perfect. Yeah. Sounds great. Appreciate it. All right. Well, thank you very much. I appreciate it. Yeah. Thank you. All right.