In 2016, the publicly-traded real estate brokerage eXp World Holdings collaborated with a startup called Virbela to create a “cloud campus” — an always-open digital environment where its agents could get training, collaborate, and socialize. eXp acquired Virbela in 2018, and it still uses the technology as its primary office. Other companies, like Royal Bank of Canada, HTC, and Rio Tinto, also use the platform. In 2021, eXp generated $3.8 billion in revenue.
As part of our recent research initiative on Web3 and the metaverse, we spoke to Jeff Whiteside, CFO & Chief Collaboration Officer of eXp World Holdings.
The need to explore. The metaverse was a word made up by Facebook. We’ve been in the metaverse for years. When you think about professional services, you’re being charged for the cost of their offices. Many of these firms have massive offices, and hardly anybody has been there for a couple years. A huge trend right now is [that] employees don’t want to go to the office, and at the same time, they’re demanding more money. I think you’re at a disadvantage if you’re not exploring new ways to collaborate.
The advantages. The big advantages are that it enables us to provide the agents with a better overall compensation package. When you see what happened back in 2007 and 2008, whenever there has been a down cycle in the real estate market, brokers go out of business because they can’t afford the fixed costs. What we’ve been able to do in our compensation model is put the money we’re not spending on brick-and-mortar back into a higher commission split, a revenue share, and equity awards. And when something goes bad – i.e., COVID – most of the other offices shut down. You couldn’t go to your brokerage. But we’re open 24/7; we run our entire brokerage globally on this platform. Just like you’d drive in your car downtown, I go into my office. We have meetings, board meetings, education sessions, staff meetings with 2,000 people. We opened 18 new countries during COVID, without getting on a plane.
Even before COVID, I’d go to offices, and they were half-full on a good day.
Back in the day, when you were looking for a CTO or CFO – their family was in NY, and you wanted them in CA. It was a bit of a nightmare. At eXp, we’re not moving anybody. They get to live where they want to live.
Even before COVID, I’d go to offices, and they were half-full on a good day. To me, virtual work just makes so much sense – from a cost standpoint, and from a quality standpoint. If you have the right people working on the team, they’re so productive, it’s unbelievable.
I travel about one-third of my time – being out with agents, or at events. But when I’m in one place, I’d say I’m online in the [Virbela] world, or in Frame [a lighter-weight, web-based piece of software Virbela makes] probably 70 percent of my time.
If you go into the world — as an example, you can go into accounting. If I’ve got my commission check and it’s $1000, and it should be $2000, I go into accounts and talk to somebody live. They pull up my records. You can do the onboarding process as a new agent in the world. We have an international group of people that run an international business for us, and each country has [its] own section of the world.
I started working in e-commerce when it was less than two percent of retail. To me, it’s a very good analogy for the metaverse and online collaboration. When you think about about e-commerce, why would you go to a mall when you can just get it on Amazon? It’s such a better way to do things.
On blockchain. You have a lot of companies, even in real estate, [that] go on and on about blockchain. The real estate agents don’t care about that. We’re heavily invested in technology, but our agent is our customer. The value proposition is what we work on.
If [blockchain] makes more sense for doing a transaction, we’ll get there. A lot of real estate has to follow compliance and regulations by state. That part of the business is older, and it’s more traditional. When you go to a closing, you still see a lot of paper.