Ash Farrugia: (00:00)
Thanks Kylie. Thanks for having me.
Kylie Davis: (01:47)
No, well thank you for making time because these are crazy days indeed. I hope you and all your guys are all... I appreciate you taking time out to have this chat, but I think we also need to try and keep things as normal as we can in the space. So Ash, we always start off with what's the elevator pitch of ActivePipe?
Ash Farrugia: (02:11)
Okay, so good question. $6.4 billion is spent on lead generation for residential real estate in the United States alone, generating around 120 million leads. That's just residential real estate. Some of the biggest portals over in the US have quoted north of 50% of their leads don't even get a phone call back. So there's a $3.2 billion lead leakage problem just in the United States of America. We know the same problem exists here as well. So ActivePipe is specifically designed to solve that problem, middle funnel lead leakage and lead nurturing.
Kylie Davis: (02:50)
Cool. And so how do you do that? Tell us about your key products.
Ash Farrugia: (02:54)
Yeah, sure. So, our product integrates into the real estate agent CRM, and you can build out journeys through the platform. So we've got several different products in our suite from the start of the text back, the product [inaudible 00:03:13] which is very much top of the funnel lead engagement product. It basically enables an agency to create content and schedule dynamic emails to their database on a one off scheduled basis. And then as you move through the tech stack, our next product's AUTO, which adds a lot of value top and middle of the funnel. So it offers sophisticated group campaigns with a lot of flexibility for an agency to build customer journeys that are aligned with their sales methodology.
Ash Farrugia: (03:46)
The content also adapts based on consumer behaviour. And the content is super timely and highly relevant based on the fact that it can kind of adapt to the way the consumers are interacting with certain parts of the content that's going out. And then as you move up the tech stack to ENTERPRISE, it works very much top to bottom of the sales funnel. So it offers everything AUTO does, but it also enables lead capture pages along with consumer profiling based on behaviour. This helps agents prospects, because we provide consumer intent in an easy to digest dashboard on the platform based on the way that they're just consuming the content that's going out from our platform.
Kylie Davis: (04:31)
Cool. So I always thought you guys just do EDMs, but no, there's an awful lot more to it than that.
Ash Farrugia: (04:37)
Yeah. There is a hell of a lot more to it than that. Yeah. Consumer profiling for agents is super important. So, the core of our product is to provide timely, relevant notifications to agents of who to call, when to call, and why to call them.
Kylie Davis: (05:01)
Right. Yep. And you're able to do that through the insights that you're getting from the engagement around the content?
Ash Farrugia: (05:09)
Correct. So we've got some... Yeah. Yeah. So we've got lots of data models. We know, through hundreds of millions of interactions, that we get to see through our platform. We know if a consumer is trending or starting to behave like other people that sold a property in the past, we know that pretty early in the piece. Typically within five or six interactions, we'll know if someone's behaving like a seller, an upsizer, a downsizer, or an investor or any of those other profiles. So yeah, we've got a lot of really smart data models that help us identify that.
Kylie Davis: (05:46)
Cool. So I'm going to go a little bit off [inaudible 00:05:49], but like how old is the business? How long you guys been around for?
Ash Farrugia: (05:52)
We're close nudging towards five years now. So we started out in Melbourne, Australia around five years ago. We launched in the US market in 2018 off the back of the Reach Accelerator Programme, which I'll help you paint some colour to that later on as well. Yeah, we launched in the US in 2018 so there are two core markets, ANZN and US.
Kylie Davis: (06:17)
And what gave you the idea for the business? What was the kind of aha moment that made you go, "God, you know what? Agents really need this thing."
Ash Farrugia: (06:27)
Yeah, sure. So I mean through my own experience at the time I'd had a few investment properties and I kind of saw that there was a real problem here. I didn't get much response when I inquired about things digitally. And then that kind of led into a whole heap of research that we did around the full suite, the tech stack in residential real estate across Australia and New Zealand, the US, the UK. And we kind of looked at where the biggest weaknesses were. We discovered pretty quickly the lead leakage problem, which is just... That's just new leads, right? That's just a $3.2 billion worth of lead leakage is literally just new leads coming in. But there's also... When we looked at the tech stack, we saw there's hundreds of millions of contacts sitting in CRMs right now as well, right? It's a lot of noise to cut through. If you think about like in Australia alone, there's north of 150, 200 million contacts sitting in CRMs because there's lots of duplicates of course, because the agents have the same contacts. [crosstalk 00:07:30]
Kylie Davis: (07:29)
Four times more than there are people in Australia.
Ash Farrugia: (07:33)
Yeah. Exactly. When you think about there's only half a millionish transactions per annum, that's a lot of noise to cut through. And we discovered pretty quickly that across all of the tech stack middle funnel lead nurturing and lead management was the biggest problem that we wanted to solve. And we saw that there were very little products that solved it properly. That's kind of how we came about.
Kylie Davis: (07:58)
Let's just pause there for a moment and hear a quick word from our sponsors.
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Kylie Davis: (08:36)
So let's talk about how marketing is changing. When I first posed this question to you a couple of weeks ago, it seemed like a perfectly reasonable question to ask, but now suddenly everything's amplified even more. But how is marketing changing in real estate sort of generally? And then let's look at more recent events.
Ash Farrugia: (08:55)
Oh, wow. Yeah, has it changed in the last few weeks. I think it's changing significantly. I think looking at COVID-19 it's a real example of this industry needing to kind of right size its digital footprint. We're starting to see real places now for virtual tool products like Matterport and the likes of digital auction platforms and even digital conveying platforms. We're seeing [inaudible 00:09:30] really hard to align their suite of digital products to digitise the transaction as much as possible, I think. With COVID-19 I don't think anything's going to change. I just think we're going to accelerate into the future a lot quicker from a digital standpoint. I think from ActivePipe's point of view, we can play a critical role in that as well for those agencies in that transformation.
Kylie Davis: (09:56)
So tell me a little bit more about how you see that playing out.
Ash Farrugia: (10:01)
Look, I think, brokerages, agencies, I think in all of the markets that we work in, the biggest challenge will be end to end, like top of the funnel right through to a transaction taking place. They're going to need to think about how to digitise that whole process. I guess the biggest challenge will be there's an emotional component to real estate transaction. That typically needs a physical interaction. I think that's going to be the biggest challenge. I don't know many people, or I haven't heard of many transactions that have happened without a physical inspection. I think that's going to be one of the biggest challenges, right?
Kylie Davis: (10:47)
Yeah. But I think probably the tyre kicking element of it or the curiosity element of it, we're probably seeing that move a lot more online.
Ash Farrugia: (10:56)
Yeah, yeah, yeah. For sure.
Kylie Davis: (10:58)
Yeah. Which also has-
Ash Farrugia: (11:03)
The other thing, yeah. I mean... Oh, sorry. Yes.
Kylie Davis: (11:04)
No, no, no. I was just saying, we just got a lot of time savings for everyone as well. So even better.
Ash Farrugia: (11:09)
Yeah, for sure. For sure. And I don't think things like open home inspections... Off the back of what we're seeing now we're hearing about the drop in numbers. I think that's going to have to change to private bookings and then there'll be the challenge around, are we being efficient around those private inspections? Are they really interested, or are they just kicking tyres? That's going to be another interesting one. So I think as a whole, it'll be interesting to see what happens around that whole property inspection element of the transaction, because that's where the physical interaction kind of needs to happen at some point.
Kylie Davis: (11:50)
So why are EDMs so important in all of this? Like, aren't EDMs a bit old school? How are they part of the digital marketing suite?
Ash Farrugia: (12:00)
Yeah, look that's a good question. Isn't social media old or isn't Twitter old now?
Kylie Davis: (12:05)
I saw the other day, I've had my account since 2008 or something, which was terrifying.
Ash Farrugia: (12:13)
Yeah, no, look, let me tell you just because we don't use the word AI or bots every second word-
Kylie Davis: (12:20)
Ash Farrugia: (12:20)
We still are relevant actually.
Kylie Davis: (12:22)
Big data, Ash.
Ash Farrugia: (12:23)
Yeah. Look, there's 269 billion emails sent across the planet every single day. Around 500 million Tweets, six billion SMSs, 3.2 billion Google searches and around 24 billion display ads are viewed every day. Now you tell me, is email still relevant? You have much higher volumes than any other thing. I think email address is still the most trusted digital address for people. It yields a much higher ROI across marketing than most other channels. We know that for every dollar you spend on email marketing in real estate, you get a $42 return, if done right.
Ash Farrugia: (13:06)
In the eCommerce space, I know Salesforce often quote [inaudible 00:13:12] numbers are around that 36 to one ratio in the eCommerce space [inaudible 00:13:18]. So it is still hugely relevant. It's still the biggest medium when it comes to digital activity.
Kylie Davis: (13:28)
Yeah. And they're pretty astonishing numbers, aren't they? If I'm an agent right now, everyone's sort of very scared and worried, how should I be using ActivePipe?
Ash Farrugia: (13:41)
Well, I think for one, people still need liquidity, right? So I think transactions are still going to have to happen. Yeah, right now eyeballs on properties digitally. It's super important, I think, to an agent. So, if they've got properties to promote, I think getting people to view those homes from their home in some way, shape, or form, that's going to be hugely important.
Ash Farrugia: (14:16)
So, for us, it's all about how can we help and then how can we help integrate other products like the Matterport, booking products for private property inspections, virtual tools and all those things. How do we actually integrate that into our product to provide a suite of products that helps them through this period? That's kind of our approach and what we're doing at the moment. We're educating our users on how they can leverage those other tools in the platform right now. Even as it stands, there's a lot you can do through ActivePipe in a time like this.
Kylie Davis: (14:58)
So what's your view on how agents have traditionally marketed themselves digitally and why do you think that needs to change, COVID virus or not?
Ash Farrugia: (15:10)
Yeah, COVID virus or not, it's hard not to bring that into it, isn't it, at the moment? Look, it comes down to value at the customer level, and authenticity. What content does a consumer need to see at the early discovery phase of listing or selling a home? What content is relevant to them to make that decision? That's hugely important. Make it about them first. Worry about yourself afterwards. Right? How can you provide them with information to genuinely help them make that decision? If for example, a buyer might be recent sales of similar properties that they've recently inquired about so they're well-informed on what these properties are closing at. Information about getting finance, things to look out for when buying a property, or the often forgot about, state costs and taxes associated with buying a home.
Ash Farrugia: (16:11)
I think a lot of agencies forget about when building content, it's the value. What value are we providing the consumer when we send out this content? It can't be all about you, right? And then for a seller, I think information that may be relevant to help them inform them to make that decision as well. Like, preparing your home for sale, auction invites so they feel and experience a live auction and know what to expect. Sold properties similar to theirs so they get a feel for the market. All those sorts of things, I think value should be the biggest driver of content. Just sending out a recipe, or what's on email, just ain't going to cut it these days, right?
Kylie Davis: (17:00)
No. Or even just every single listing you've got in your book to potential buyers. I mean, it's just easy enough to sort of break them down into what those buyers were inquiring about and making them relevant specifically to their criteria.
Ash Farrugia: (17:17)
Yeah, sure. And I mean, everything I've said to you just then is available in the platform as it stands now and could be done fully automated, right [inaudible 00:17:25] yeah. So, as soon as a category changes in the CRM and someone's become a potential seller, or we identify that they're a seller, they can go on that automated journey and be well-informed, and there's plenty of... The luxury we have in real estate is, for whatever reason, it's taken a while for agencies to really adapt to building solid content for this industry. But we're in an industry where people are obsessed with property, particularly in Australia, right? And we've got access to a lot of content. Content being property feeds, property information. So consumers, they're hungry for that information. If you can get that content right and just add value to the content that you're sending out, I think that's the key priority.
Kylie Davis: (18:16)
Yeah. So I couldn't agree more as a proud content provider. Yes. Start telling people the right stories. So who are your competitors in this space?
Ash Farrugia: (18:28)
Yeah, good question. Like I said earlier, when we first did the route searching in all of the markets, there was no real one-to-one competitor. I think that's still the same right now in any of the markets we're in. It was one of the reasons we really focused on middle funnel lead nurturing is we truly understood the size of the problem, and no one truly had a solution to solve it. So I'd say there's a different kind of competitor when you think about budgets. So there's always lots of competitors when you're talking about share of wallet or share of budget within a real estate brand, brokerage, or office.
Ash Farrugia: (19:09)
There'd be a fair amount of competition if you look at it from that angle. There's always a budget per agent for technology across brokerage, office, or agency. They always have some sort of budget. You just need to made sure that your product's relevant, provides real value, and I mean real value, not just in your opinion, but from your customer's point of view, when they make that decision to buy your product that you're going to truly make them happy after 30 days. You don't want to just think that they're going to be happy. You want to have the confidence that you're providing enough value. That's a really important question to ask yourself as a startup. Is my customer going to be happy in 30 days when my customer success team call in to check on the product? If you just think that, you don't know that, then you're going to have a whole heap of trouble selling it into that network.
Kylie Davis: (20:01)
Yeah, true. Let's just pause there for a moment and hear a quick word from our sponsors.
Kylie Davis: (20:07)
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Kylie Davis: (20:57)
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Kylie Davis: (21:16)
So tell me a little bit about the last couple of years. So since you joined the NAR REACH programme, how has the expansion into the US gone? What are the lessons that you've learned from that?
Ash Farrugia: (21:30)
So we were in the NAR REACH programme in 2018 actually. We leveraged that programme to sort of segue us into the US market. It was a awesome experience for us, a huge learning curve. We learned a lot about the market. We were introduced to a lot of the players. Off the back of that, I think product to market fit was our biggest challenge. So, trying to get our product to actually fit a new market was... We knew that we had a great product to market fit in Australia. We had great adoption, great growth and success in that market. In the US it's totally different, right? You've got buyers and sellers agents. You've got big brokerages. The buyer persona is different. You're dealing corporates. You're not just dealing with individual offices.
Ash Farrugia: (22:29)
It's a different sort of sales approach as well. So we had to factor all those challenges in, not only from a product level, but even a go to market perspective, but the guys at NAR were great. We've been lucky enough for them to participate in two of our funding rounds post that as well. So they've been huge supporters of ActivePipe, and then they'll typically only invest in a platform that they think is going to radically transform the real estate ecosystem over there. So it's a huge endorsement, but also they've just been fantastic guys to deal with. So I couldn't recommend them more to anyone.
Kylie Davis: (23:08)
And big shout out to the NAR team. This is another question off the record, Ash, but I think it's one you'll be comfortable with. The worst case scenario of using ActivePipe would be to just be spamming your existing customers with information that they're not interested in, in an email that they want to quickly unsubscribe from. But what is the best case look like and how hard is it to set up some of those automation or those journeys?
Ash Farrugia: (23:40)
Yeah. So our customer success teams are there to help set that up for you. We've got out of the box solutions for whether it's a big brokerage over in the US, or a single office here in Australia or New Zealand. We have solutions that we know work and are very tailored based on... For example, you can set up a journey that might say that for any new buyers that come into my CRM, I want them to receive sole property reports every month with properties that either match their profile, so they get a sense for the market, and that could just be running recurring. And then off the back of those interactions you can then build out journeys as well. So if they're highly interactive with some of those properties, you can follow on with auction invites to other properties and all sorts of things like that.
Ash Farrugia: (24:36)
But really we don't expect our users to just hop in and think up this stuff themselves. We have a success team to really, really help them get that engaging content out. And then it's all about iterating. So once you go live with your customer journeys through our platform, our success team will check in with you every 30 days to kind of iterate and improve some of those communications, whether it may be just adjusting subject lines, or building up those trails for the [inaudible 00:25:05] pipeline to keep them engaged.
Kylie Davis: (25:08)
Yeah. Fantastic. Cool. So look, normally at this stage of the interview, I'd ask what you think the next five years is going to hold for the real estate industry, but I kind of feel like maybe it should be the next five days at the moment. What's your take on it? How are you feeling about the COVID stuff and yeah?
Ash Farrugia: (25:26)
Yeah. It's interesting.
Kylie Davis: (25:30)
It's hard to know.
Ash Farrugia: (25:31)
It's pretty foggy at the moment, right? It's hard to know every day. I mean, we're having check-ins internally twice a day now, just checking in, see how things are going, so we can iterate and respond. But I guess, at a higher level you would have to think that real estate's a market, no different to the public market, the ASX. People will need liquidity, so properties need to transact. So with or without coronavirus I think that needs to somehow happen. I think coming out of coronavirus, early signals would tell you. You'd have to think that there'll be a flood of properties coming to market as people need to divest, and you'll find, I think that there'll be an adjustment.
Ash Farrugia: (26:26)
I mean there is more demand right now, than there is supply. I think that might true up and there's room for that to true up, but it's just how much that'll true up and whether it will end up coming out into a buyer's market or not. I think that's something we can only speculate on right now, but it's looking possible, right?
Kylie Davis: (26:46)
I guess like what we saw if you look at the data from SARS in Hong Kong when that hit really hard back in, I think, 2003. The biggest risk is that there's no transactions at all, or if the transactions fall off a cliff. I mean, with SARS prices stayed pretty high, but because volumes were so low and so it was so hard to find anything to buy. So if we can keep sort of some kind of movement in the market in terms of transactions, which is one of the reasons why it is so important that agents become better or savvier digital marketers to keep talking to their potential buyers and sellers and especially loving up their buyers. I guess that's right. It's really so important right now that we embrace that as a skillset that we need to learn.
Ash Farrugia: (27:35)
Yeah. I think that's right. I mean, if we can continue to transact through the next period, I mean, short term talking 30 to 60 days, I think that'll be a really positive thing. But yeah, at the moment it's so foggy. You can only speculate, right? I wouldn't think there'd be a board on a company anywhere on the planet that would be prepared for what's happening right now, right?
Kylie Davis: (28:03)
No. God, no. No, no, no.
Ash Farrugia: (28:07)
So I think anything we say now, it'll be speculating. Early indicators are kind of, what I said earlier, I think it's kind of feeling like it might shape out, but I guess we just got to [inaudible 00:28:19]. Unfortunately there's a lot of hardship happening in the industry, and it's just really sad to see, and we're just doing everything we can do to help our customers, and even customers that are wanting to jump on the platform and get digital transformation happening. We're just trying to help them out as much as we can.
Kylie Davis: (28:38)
Yeah. What does the future look like for ActivePipe?
Ash Farrugia: (28:41)
Yeah, no worries. So for ActivePipe, I guess for us, we want to continue to solve that problem, and we want to continue to eliminate friction for an agent to list and sell a home as much as possible. For us, we'll be putting a huge focus over the next five years on innovation, and we really want to be an essential piece of technology for an agent. We genuinely want to help solve the middle funnel leakage problem in residential real estate. That is a genuine problem that we want to solve at the company and platform. And we'll continue to do so over the next five years.
Kylie Davis: (29:26)
Fantastic. Ash, thank you so much for your time. I really appreciate it. I know it is crazy out there at the moment, so thank you for taking half an hour out to have a chat with us today.
Ash Farrugia: (29:37)
Oh, it's a pleasure. Thanks Kylie.
Kylie Davis: (29:39)
So that was Ash Farrugia, founder and CEO of ActivePipe. Now I'm a big fan of Ash's. The ActivePipe technology was actually one of the first legitimate PropTechs I saw in action at a conference while I was still at CoreLogic. And it really blew me away. In fact, I think probably ActivePipe was my first PropTech crush. Listening back on this podcast, it was a hard one, and I'm really grateful to Ash for going ahead with it, because I had a lot of cancellations over the last couple of weeks. But digital marketing and understanding lead conversion are two absolutely essential skills that modern real estate agencies need to have in place. And the COVID-19 crisis has underlined the importance of this more than ever. One of the reasons the industry is being hit so hard right now is because we have avoided embracing the digital marketing space.
Kylie Davis: (30:27)
We've preferred legacy advertising and legacy systems that are just not flexible enough and are not giving us the data that we now need. We need to become better digital marketers and understand the importance of building relationships with our clients and potential clients all the way along the marketing funnel, not just when they're ready to sell or ready to buy. And we need the smarts in our business to help us track and trace those leads and make great decisions off that data so that those click throughs are going to tell us.
Kylie Davis: (30:56)
So I love that ActivePipe is not just out of the box, but has a customer success team helping agents to set this up. You don't need to know it, you just need to know who to ask for, for help and they'll hold your hand while you get it right. So if you want to take control of your marketing and lead generation, even though things are crazy right now, ActivePipe is the perfect tool to do that.
Kylie Davis: (31:17)
So now thank you for joining me this week. I know it's been a really crazy couple of weeks. If you have enjoyed this episode of the PropTech Podcast, I'd really love to tell your friends or drop me a line either via email, email@example.com, LinkedIn or on my Facebook page. You can follow the podcast on Spotify, Google Podcast, Anchor, and Apple iTunes. So I'd like to thank my audio support Charlie Hollands and the very wonderful Jill Escudero and our sponsors this month, Smidge Wines, official wine of the PropTech industry, and HomePrezzo turning your data into amazing marketing content, and both those businesses have offers to help you through the virus. HomePrezzo is offering extended free trials for growing your marketing content, and Smidge has a free delivery for boxes of six or more wine. So thanks everyone. Until next week, keep on PropTeching.