The Change Agent
Commercial Brokerages Have Been Adverse to Change... One Company is Looking to Shake Things Up.
The real estate brokerage industry has historically been behind the curve from a technology perspective. Anyone who has ever purchased or sold a home knows how frustrating the process is. Friction exists at every step of the transaction, not only creating anxiety for clients, but also increasing the amount of administrative work that agents need to complete for every deal. A true end-to-end solution still does not exist, so agents must use several disparate systems to go from the prospecting stage to the closing stage. Fortunately, there is a significant amount of capital flooding into this space, and several companies claim to be close to having a single platform to streamline the entire process of buying and selling. Between all of the vertically integrated iBuyers like Opendoor and Offerpad, the large franchise platforms like Keller Williams’ Keller Cloud and Realogy’s Productivity Hub, large independent brokerage platforms like Compass’s Technology Offering and @Properties’s pl@tform, and pure software players like BoomTown and Skyslope, the residential brokerage industry has made real strides towards modernization. There is still a long way to go (as Fifth Wall’s Vik Chawla recently told me, “This is just the early innings of the growth of PropTech”), but we are getting closer every day. Although the residential brokerage industry has started to really embrace technology, commercial real estate brokerages (specifically investment sales) haven’t done the same.
The Change Agent
Mike James had been a legendary broker at one of the largest Commercial Real Estate Investment firms in North America. He had a meteoric rise in success due to his unparalleled work ethic and drive. Although Mike continued to see his production grow, he became frustrated by the archaic systems and tools that the brokerage world offered. While technology cannot replace hard work and determination, it can play a massive role in creating efficiencies in the business. He knew that technology could reduce countless hours of time that each deal required, contribute to more deals for each broker, and ultimately improve the client experience. In 2018 Mike left to start up his own firm. He was determined to build a better brokerage. 4 years later, James Capital Advisors (JCA) is growing year over year by 110%. They were just named to the Commercial Property Executive list of top 20 Most Powerful Brokerages and they continue to recruit top talent.
I first met Mike in October of 2020. Immediately, I recognized that his view of the industry was very different from anyone else that I had met in this space. During our initial conversation he continuously stressed the important role that technology played in the industry. Even though his production continued to grow at his prior company, he felt encumbered by the lack of integrated systems and tools that were available to him, so he decided to build a better brokerage on his own. He hired technology and marketing experts, and he launched JCA. I was really intrigued when he mentioned that he built his platform on Salesforce. While Salesforce is the leading CRM platform in the world, you typically find tech companies and enterprise companies as customers. I had the privilege of chatting with Mike recently to better understand what makes JCA so special. Below is the interview:
Before we discuss technology, I want to understand what made you stand out from from other brokers. Many people join this industry, but very few achieve your level of success, and even fewer do it as quickly as you did. What was your secret sauce?
I have a strong work ethic, but so do hundreds of brokers out there at competing firms. I realized early on that I also needed to work more effectively to meet my goals. For example, after 18 months in the industry, I hired an admin to take over routine tasks and was able to nearly double the time I spent prospecting each week. My income quadrupled over the next 2 years and by my 6th year in brokerage, I ranked fourth in the nation for net-leased transaction volume, mostly by devoting maximum time to building relationships, evaluating complex portfolios and prospecting.
You grew a very successful career at a well-established traditional brokerage company. What was it that frustrated you about the traditional brokerage industry? What did you feel was broken, and what did you aim to fix with your new company?
I learned a great deal working for a traditional brokerage and the experience was invaluable, but I did get frustrated with the fact that the firm didn’t know who the clients were – their unique perspectives, values, goals and experiences. I saw hundreds of brokers independently calling the same prospects in the same day, with no idea what any of those other conversations entailed. As a broker, it stifles collaboration when you have to be constantly on your guard, worrying that a colleague will try to steal your client or cut you out of a transaction. The clients typically don’t understand why they are being contacted by hundreds of brokers from the same firm, and that lowers the probability of the firm or any given agent at that firm being hired. I knew we could serve clients better by freely sharing information and insights. Our firm would know who the client is and provide value across all its products and services. This particular value proposition becomes incrementally more valuable as those products and services grow, which is an area we are currently focused on.
And of course, I saw a similar inefficiency in the disjointed technology at the major firms. I found myself spending too much time entering duplicate information, because the half-dozen systems we used didn't communicate with each other. Other firms have several different technologies that don’t talk to one another, all of which are generally archaic and don’t provide enough value in the first place. Our firm operates on one cloud-based platform that houses everything from a cold call to a marketing package. The tech stack is best in class, and we have been approached by several companies to license and sell it.
The real estate industry has been historically slow to embrace technology, and CRE has been even slower. When you started JCA, how did you approach building your tech-stack? What were the must-have features that you needed to offer?
We designed our platform to address both of the major shortcomings I had observed holding back performance at other real estate firms – those being siloed systems and the lack of a tight-knit, collaborative culture. Instead of using five or six programs, our agents use a single cloud-based system that helps them manage everything. Automated reporting and processes enable our agents to source clients, draft documents, request marketing support and access other services in one centralized place. It is the most efficient platform in brokerage, and it lets our agents focus more of their time on what matters most.
The platform is built for collaboration with full transparency between agents. Safeguards provide a singular client experience, preventing for example, a broker from contacting a client about an opportunity they are already discussing with another one of our agents. By putting everyone's activity out in the open, collaboration occurs spontaneously and builds on itself.
If you were sitting in front of an established broker, and they were trying to decide whether to join JCA or another brokerage, what reasons would you give them to affiliate with JCA?
I would show them that on average senior agents that leave any other firm to join JCA are producing 25% or more in additional gross income within 18 months of joining the company. We just had an agent join with 4 years of experience from a large brokerage firm where they completed $375,000 in gross income in 2020. They are tracking toward $1.5 million, possibly $2 million this year, and they credit our marketing team, tech stack and collaboration for their success.
What is next for JCA? Are you looking to double down on your existing markets, or are you looking to open offices in new markets? Do you plan to expand into other segments of the industry?
We will be adding difference products and services. We have added Capital Markets and a Cannabis Division thus far this year and expect to add one additional product type by year's end.
You are 4 years into this new journey. What have you learned? What advice would you give to other entrepreneurs who are looking to start a company?
Building a strong culture is extremely hard. Get the right people on the bus and just burn your boat already!!!
Is there anything else that you would like to share in this article?
I would like to acknowledge and thank the clients and colleagues that have supported me in my career and that continue to grow with our firm today. Relationships are at the center of this business and are the foundation on which we continue to build.
If you are interested in learning more about James Capital Advisors, you can reach out to them directly here.
Please join PropTech Future on September 14th at 10:00am EST for our first PropTech Startup Pitch Competition. Tickets to the Virtual Event can be reserved for free here
Check out the pitch decks for all of the innovative startups that have entered the competition here
We have lined up a World-Class judging panel made up of the following VCs and PropTech Executives:
If you are the founder of a Pre-Seed, Seed, or Series A PropTech/Fintech startup, its not too late to enter the competition. If interested, please complete this submission form application here
All of the rules can be found at here
Special thanks to our amazing Sponsors: