Kylie Davis:

Welcome to the PropTech podcast. It's Kylie Davis here, and I'm delighted to be your host as we explore the brave new world where technology and real estate collide. It's so great to have you here and to share stories of innovation and opportunity across real estate, property and building services.

The aim of each episode is to introduce listeners to a PropTech innovator who is pushing the boundaries of what's possible across how we design, build, buy, sell, rent, and invest in property and all of the associated behaviour and activities around that. Now, none of this would be possible without our sponsors. So a big shout-out to the Direct Connect team making moving easy, Dynamic Methods, the innovators behind the Forms Live and Realworks forms, and the PropTech Association of Australia. Thank you for your support of the podcast.

Now, we've got a really special episode for you today. Some of the most popular episodes of the PropTech Podcast this year have been interviews with Simon Baker, Founder of the PropTech Group and one of the founding fathers of Australian PropTech, and in a later episode, Joe Hanna, CEO of PropTech Group on running an ASX listed scaling PropTech.

Now, completely separately, David Bowie, CEO of MRI Software, also notched up a place in the top 10 discussing his vision on how to make a 30-year-old PropTech future forward. When MRI software announced last month that they proposed to buy the PropTech Group, I figured that was really big news for listeners. The deal, still to be approved by regulators, is at 60 cents a share, which gives the PropTech group a value of 93.4 million. All being well, that will go through in February 2023. It's part of a bigger acquisition that MRI Software have been executing over the past 12 months under David. So I wanted to get him back onto the show and hear more about it because this is significantly going to impact the shape of the Australian PropTech landscape. David Bowie, welcome back to the PropTech Podcast.

David Bowie:

Thank you, Kylie. It's lovely to be here.

Kylie Davis:

Yeah, great to have you here. Now we are going to talk today about the MRI proposal to acquire PropTech Group.

David Bowie:

Indeed.

Kylie Davis:

Is that the correct language?

David Bowie:

That is correct, yes.

Kylie Davis:

All right. That's how I have to say-

David Bowie:

Proposal's good.

Kylie Davis:

Proposal to acquire. But before we start the podcast, we always ask our guests to give us the elevator spiel, and I'm going to ask you to give it to us again because I am curious to hear if it's changed at all since you've announced the acquisition.

David Bowie:

I'm going to say it's actually not changed. I mean, our purpose in particular has not changed, and we put at the core of it that we believe people thrive in well-connected communities. Since we last spoke we've been connecting lots of different ways.

Kylie Davis:

You sure have.

David Bowie:

There's advisory boards, industry initiatives like RISE, which you know very, very well, with clients. So that hasn't changed, and I think that's always going to be the forefront of what we do. The other thing I'd say is that our vision hasn't changed. Our solution focus, which in the residential space, our focus on what we call MRI living for agencies, and that's really about providing simplified tech solutions that span the life cycle of a person's journey. I think the last time we spoke, we talked about helping a person in their life cycle, their journey with property from being a tenant to a buyer, to a seller, to a landlord, and all the things that go in with that.

I think since we spoke, we've recently done an industry survey, and in that two-thirds of consumers said they would love to work with one agency for all their property needs across that lifecycle. We're really clear in our vision that the real estate agency is our client, and it's about solutions that help us deliver to them. The how we deliver that vision also actually hasn't changed. We talk about we build technology, we partner through our open and connected ecosystem, and we acquire companies. Really that last bit, that acquire companies, is part of how we're executing on that vision. So I'd say the elevator pitch hasn't changed. I think our ability to execute it has improved dramatically, assuming all goes well with the PropTech acquisition.

Kylie Davis:

Awesome. Well, I can see that since you were also expanding the reach of what you're doing too, because a couple of years ago before you came on board, MRI and previously Rockend, was known for its expertise in the property management space. But now you are kind of across everything that well, increasingly everything that a real estate agency would be using, right?

David Bowie:

100%. Very much so and certainly bringing, this is a major play in particular the residential, bringing together property management and sales as a core component of that.

Kylie Davis:

I love that we're no longer starting as an industry to see property management over here, sales over here, never the two shall meet. They actually do need to come together, right?

David Bowie:

100%. Met someone yesterday and talked about moving upstairs, downstairs to keep connected because it's not just about technology of course. Culturally and business wise we've got to be connected as well.

Kylie Davis:

So slightly cheeky question. Can you list for me, David, all of the PropTechs you've acquired in the past 12 months?

David Bowie:

Of course I can. I'm not going to list them all globally though.

Kylie Davis:

No. Okay. No, no. Well [inaudible 00:05:26]

David Bowie:

But certainly locally.

Kylie Davis:

AsiaPac. [inaudible 00:05:27]

David Bowie:

On our commercial occupy side, we acquired LeaseEagle, which is particularly strong in the retail space with lease accounting and compliance solutions. You really lead retail brands there. The other big ones, Box+Dice the second half of last year, and Box+Dice is also in the sales CRM space. Tremendous client base in Melbourne in particular. That was part of that bringing together property management and sales. Also, PropertySuite in New Zealand. Over the last couple of years we've built a really significant presence in New Zealand. I think we've now got something like 80 staff in New Zealand in particular across Palace and PropertySuite. Similar to what we're doing in Australia is bringing together sales and property management. They're the big three in the last year. Hopefully soon we will indeed finalise the PropTech acquisition.

Kylie Davis:

So the official language around that is that you've recently announced that you've entered a scheme of implementation deed with PropTech Group. Tell us a little bit about the deal.

David Bowie:

We have to stick to the technical term. Yes, it is a scheme of implementation deed. What it basically means. Yeah, we can't pop the champagne corks yet, but it's looking good. The offer we put to Joe Hanna and the board at PropTech Group has been unanimously accepted by the board of MRI and being recommended by the board of PropTech Group. So now it's got to go through checks and balances with regulatory bodies, shareholder approval, those sorts of things. But certainly we're optimistic we'll be able to kick off the formal integration piece early in the new year.

Kylie Davis:

So what's driving your acquisition strategy?

David Bowie:

We've been in the business of real estate software for 50 years, more than 20 in this year. So this is really about our strategy. How do we continue to grow and innovate? It does come down to those three things: build it ourselves, partner for open and connected or acquire. So this is part of how we deliver that innovation, and we're always looking for solution providers that might be part of an acquisition or part of our partnering technology stack to deliver what's in the best interest for our agency clients. PTG, the products in the PTG space do fill a unique segment around offering that end-to-end capability across a person's journey through the ecosystem. But there's also a few point places in that mix that fill some specific needs as well, which we're excited about.

Kylie Davis:

Tell me more about what they are. Tell us about the products in the PropTech Group suite that get you excited. I feel like you've done a big ... The price that you're getting it at and the value that you're getting if the deal comes off, it feels like it would be hard to build all of those businesses for the amount that the price is.

David Bowie:

Yes. That's exactly right. I think-

Kylie Davis:

It's good shopping.

David Bowie:

It's fun. It's fun as well. Not that it's my personal chequebook, but it is good as well. But it's a great deal. It's a great deal for our clients as well. I think the incremental value it brings by combining our two business for our clients, for MRI Software, it wouldn't have continued if we'd continued as competitors in that market. So if you look at the core stack that they've got, Eagle and Vault well-established in the CRM space. A lot of our clients use Eagle and Vault. A lot of our clients use both.

So our ability to execute on that vision of delivering a better outcome for those clients is dramatically enhanced by us being able to very, very tightly work in those two areas. The best deal is not for us or for PTG shareholders, it really is for our client base. We've had great reaction from them. So you've got that core CRM piece, but they've also got some great products, Website Blue and Design Leap Pro, which are innovative around marketing areas and on the property management side, Rentfind Inspector, which we knew was a gap in some of our property management offerings. As an acquirer, we're probably well-placed to leverage what PropTech Group has built to really deliver values to the client base.

Kylie Davis:

Awesome. So you recently at the MRSN conference announced your Agora strategy. I love the name. Are these acquisitions part of that? Does Agora make it easier for you guys to roll this stuff out?

David Bowie:

Well, Agora is a platform strategy, which is a fundamental part of our philosophy. That is we want to give people the data they need to run their business across their life cycle, and that's what underpins everything we do. What PTG brings into that platform arena is some products to integrate into it. So what sits on the Agora platform is a range of solutions depending on what your role is in your property ecosystem. So whether you're a property manager, a sales agent, a principal, a trust account, whatever it is, those solution's there. Certainly PTG brings strong products in there and you could think about it, the products and the loyal clients that PTG have is our why. Agora is the how we then deliver on that.

Kylie Davis:

Okay. Awesome.

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MRI Software is a huge global organisation and you're based in the US. With the greatest respect, US businesses do have a little bit of a reputation of completely changing everything when they come into a company. I've experienced that myself firsthand. What have you guys got planned here? Which playbook are you following?

David Bowie:

Listen, I think it's fair to say MRI is a significant organisation. We've got over 3,000 people worldwide, but I would certainly argue that's not the reputation we have here. Certainly not the reputation we want to have. So what do we do about that? For starters, at the end of the day, I have full responsibility and accountability for how the APAC region runs. The buck stops with me. I'm very much active and engaged in the market with our client base. I am MRI in this region. I report directly to our Global CEO, Pat, and his mandate to me is to build a client-centric organisation, ensure I represent the needs of our clients back to the global level. That's what is important to me.

Interestingly, we do take a pulse check of what the clients of the organisations we acquire think after we've taken them over, and pretty much without fail, we've had a positive response from our clients on the impact we've had after we've taken over an organisation. I think that's the most important measure to that question is are we doing the right thing.

My number one focus, and you know me, I don't come from a tech background or a real estate background, so my number one focus is to build a team that's got a great culture and a focus on client success. That's the best I can do, and I'm really excited about building that team. We do have some great people and that's the best way we can bring a very, very flavour. Ultimately, we've got hundreds of people on the ground in this region to deliver on that. There's change. It comes with acquisition for sure, but ultimately it does get to that outcome.

Kylie Davis:

What's your secret to is culture, or how do you scale culture across different cultures that are coming into yours?

David Bowie:

At the end of the day, my job is as simple and as complex as getting the right leaders in place. My view is how do you scale it? Hire and empower leaders at every level who believe in our purpose and vision. That's step one. Step two is listen to them, hold them accountable and get out of their way. I expect our product managers, they own the product roadmap. It's got to be informed by clients, all those sort of things. It sounds easy on ... I know it's harder than that, but you-

Kylie Davis:

Oh, it's so much harder.

David Bowie:

[inaudible 00:15:19].

Kylie Davis:

It's like the simplified tax system. Takes a lot of work to get those little boxes filled in.

David Bowie:

Exactly. So that's what that's about.

Kylie Davis:

When I interviewed Simon Baker, the PropTech Group Founder, he commented that, and Joe Hanna backed it up too, that the PropTech Group had been launched on the ASX as a way of supporting the real estate industry by letting anyone in the industry invest in a really transparent, easy way into PropTech. But the share price I guess always indicated that they struggled to sell that dream. What do you think occurred there?

David Bowie:

Listen, in some way, I guess that's probably a question more for Simon and Joe. What we do know though at the market, the current capital market more broadly are certainly struggling. At this time here they decided this was in the best interest of their shareholders. I think that certainly makes sense.

Kylie Davis:

Who else is on your shopping list? I know you said it's not your chequebook, but I used to have a $3 million marketing budget when I was at Call Logic and the dopamine hit you get is still the same.

David Bowie:

I know, I know. I mean, we are on the record of saying we are going to continue to look at acquisitions. What I'd say though, in the current environment, the value proposition needs to be very, very clear and needs to be very supportive of that vision. That vision is again, continuing to focus on the real estate agent, the buyers ... Well, in the resi space, it's the real estate agent. They're our clients. So if it adds value to them and is good value for money, then we'd look at it. On the commercial side, owners, operators occupiers of real estate assets, we continue to look around. We're on the record of saying that. We'll be judicious.

Kylie Davis:

Where do you feel the gaps are in your portfolio now if the PropTech Group acquisition is successful? After that?

David Bowie:

Listen, I don't think there's any glaring gaps. There's always across the ecosystem, there's so many different aspects of the process that you could do more at. We look at it in terms of developing the roadmap. Roadmap heads in that direction anyway. As acquisitions come up and it's part you've got to have a willing seller. We probably do less active prospecting in the market to look for buyers, but we get a lot of inbound when a seller is ready to sell. We'll always have a look at it, whether it fills a particular niche area in the process or in the stack, or whether it's actually accelerating what we're already doing. It really depends.

Kylie Davis:

What's the technology that you're seeing out there, or what do you think are the tech developments that you're seeing coming down the pike that you think are impressive or that you think are going to inform what's coming next in the space?

David Bowie:

I think there's two things that are really important in today's environment. In today's world of cybersecurity, anyone who doesn't [inaudible 00:18:26] the security and privacy and looking after and valuing data, that's got to be number one. That's not just the technology solution. That's people and process and education as well. I know you are doing a lot, and we as an industry need to do a lot to educate people about their own responsibilities.

Kylie Davis:

Stop sharing your passwords people. Yes.

David Bowie:

That sort of stuff. Two-factor authentication, all those sort of things. I think anything technology wise that aids that is going to be good. The second thing I think is really key is around artificial intelligence. The most important asset people have in the tech stack is the data they have. It's not just about protecting, it's about leveraging it for the benefit of the owners of that data, the clients of that data. I think the things that are exciting is as businesses are becoming more aware of the value they've got in the data, and that's about moving from analysis to insight to action. When you can turn an insight and our view of this lifecycle view of a client, it's actually about using data to add value to the people in the ecosystem so that as a real estate agent can be a trusted advisor to actually add value to their conversations, to their journey with the most important asset they have in their life.

That comes down to data, how that data is used to make decisions, whether it's under the terminology of artificial intelligence or just smart use of the information I have. When we look at our end-to-end solution, people are always looking for leads. We know sales agent's always looking for the leads. A lot of it's already there under their nose. It's about getting to that data. Rather than having to pay for a lead multiple times, it's about surfacing it to an action that can trigger an appraisal, hopefully a listing, a sale, whatever it is. That's what we want to do. I think the emerging trend will continue to focus on the data asset as a key area.

Kylie Davis:

Awesome. Do you run a PropTech business or are you the founder of a PropTech? Make sure you join the PropTech Association of Australia. It's Australia's new not-for-profit association, made up of tech people who are passionate about the property industry and committed to improving experiences in how we buy, sell, rent, manage, build and finance property. Joining will give you access to events and networks across Australia and globally to help you promote and grow your business. Go to proptechassociation.comau and follow the prompts to join.

You've just recently joined the RISE initiative as a new director. Congratulations.

David Bowie:

Thank you.

Kylie Davis:

I know mental wellness and mental health is a really important issue to you personally. What's your comment on the status of mental health and wellness in the PropTech founder sector?

David Bowie:

PropTech founder sector?

Kylie Davis:

Are you finding people coming to you because they're sort of going, "You know what? I'm kind of cooked, I'm done," or are they looking to exit because they're looking for a bit more support? Am I drawing huge bows here?

David Bowie:

The plural of anecdote is not data, but a couple of anecdotes would say that I've had people reach out to me because when you hear someone talking, as we know this through the RISE initiative, it starts with having conversations. As I have talked about mental health and wellness, and as I've shared some of my own personal exposure to that, people do come and say, "Hey, this is hard," or whatever. I think that in the founder side, it is particularly tough areas at the moment.

I haven't got data that says it's any better or worse than it was, but obviously there's some amazingly capable, incredibly inspiring founders out there who are doing amazing things with technology. I would hope as an industry they can see their way through to the end game and what that's about. Because I know for us, whenever we acquire a business that's being founder-led, I have enormous respect for people who can build a business, give people jobs, create something new, build client base. For us, we always want to respect that past and build a new future when we acquire companies. But even those who are still out there independent, it's a tough journey, but some people do it amazingly well. There's some really clever people out there.

Kylie Davis:

We use different parts of our brains though to create something from nothing, to edit or improve or build upon the processes, though, right?

David Bowie:

100%.

Kylie Davis:

There are two very different skills involved in starting and then scaling and then running an established business. What does the next 18 months look like for MRI? Shopping?

David Bowie:

Well, I'd probably say I would hope that in 18 months time we've seen some real, we measure client satisfaction, we measure employee engagement. Those have been improving, and I want and expect those to continue to improve. That's probably first and foremost to me.

The second thing I'd say, especially if I focus on the MRI Living space, that our agency clients are realising the value of their people, their technology and the data they have to deliver on their promise to their clients. It comes down to things like mental health as we were talking about, but it comes down to using my data to deliver on their promise to their clients. Ultimately, I want us to be recognised as an integral and positive contributor to a thriving industry. It is a great industry. I've just loved being involved, and I've loved meeting people who really have a passion for the quality and the values of the industry. I really want to personally and for MRI to be a part of that positive contribution to a thriving industry.

Kylie Davis:

Fantastic. You're speaking and hosting one of the sessions for the RISE Initiative Leadership Awakenings on March 26-28 too, right?