Kylie Davis: (05:05)

So my guest for today is Patrick Hill, from Realm, and the father of CLAIRE, the latest AI in real estate. So Patrick, welcome to the show.

Patrick Hill : (05:19)

Thank you. Thank you for having me.

Kylie Davis: (05:20)

So Patrick, we always ask everyone on the show first up, what's your elevator spiel?

Patrick Hill : (05:27)

My elevator spiel is that the value of CLAIRE is not so much in the multitude of things she can solve within a busy property management team, but in the value in the time it gives back to the individual property managers. So we're solving anywhere up to 30 to 40% of the total property management time against monotonous and painful things. We take the pain away in those spaces.

Kylie Davis: (05:52)

So just give us a little bit of an overview on what CLAIRE does.

Patrick Hill : (05:55)

Yeah, she does a number of things. She can, in modules, be switched on to do an after hours concierge service, where she answers anything from maintenance to general inquiries, and that's a conversational piece. She does rental arrears chasing, so when your rent gets behind, she'll go out and have conversations with you about what that is, and why you haven't paid, and when you can pay, and is there a payment plan required. And so that's a full conversational piece again, but that's outbound. She runs on email, on SMS, on Google Home, on Google Assistant and a whole lot of communication mediums. So where your tenant is, CLAIRE is there to answer the query. So very much around supporting or being a personal assistant to the property manager, to make their lives easier.

Kylie Davis: (06:41)

Right. So she's a personal assistant for me as a property manager. And when you say she's part of the conversational piece, she functions inside Google Home, doesn't she?

Patrick Hill : (06:53)

Well, not exclusively, no. So she works on Google Home and that was the first release that we did. So we had Google Home and Google Assistant, and of course that's a download for iPhone users, but you don't need to have a Google Home in the home. She also works on SMS, that is you can advertise a mobile number for her to talk to your tenants. And so the tenants can write an SMS saying, "I've got a broken tap," or, "How much rent do I owe?" Or any number of 50 different things. Or it could be an email. So you could ask CLAIRE to monitor an email address and as tenants write in and say, "I've got a broken tap, can you fix it?" She can go back and say, "Can you give me some more details? Send some photos?" She'll create a job, send it off to the plumber or whatever it is that needs to happen, she can automate the full work form.

Kylie Davis: (07:32)

So she's kind of like a combination of a chat bot and an automated respondent. I mean, forgive me if I'm either simplifying, but I'm just trying to really capture what she does.

Patrick Hill : (07:44)

The purest inside me is screaming right now, Kylie.

Kylie Davis: (07:46)

I know, I'm so sorry.

Patrick Hill : (07:49)

I rage against the chat bot. I rage against that AI. Look, she's very much machine learning. She's been trained by thousands and thousands of interactions, so it is very much machine learning. So when you say chat bot, the problem with chat bots is they promise high and under-deliver because they tend to just offload the first part of the conversation. So very much, "What can I help you today?" "Oh, I'd like to get something fixed." "Okay, just give me some details and I'll hand it over to your property manager." It doesn't do that per se. It'll do that first part, but then it goes on to clarify it, and quantify it, and put it into a job within the property management software, and document it, and then push it off to the supplier to fix the job, and let the property management know.

Patrick Hill : (08:33)

There's a series of things that happen that aren't chat bot-esque, in terms of what you see in the chat bot world today. So highly capable machine learning orientated, and does the actual actions of the conversation. So when the tenant says, "I need to get something fixed," she goes and gets it fixed for them.

Kylie Davis: (08:50)

Right. So what's she integrating with at the back end? What CRM is she connected to? Or how is she doing those next steps after the chat bot part of it? Don't kill me. After she's clarified in whatever format that is, where does she go then?

Patrick Hill : (09:10)

Well, once she gets past that part of figuring out what's going on and what the end objective is, she'll then talk to PropertyMe, which have 2,500 agencies right now, VaultRE, which is a new entrant, a really exciting new entrant into the marketplace because they're both sales CRM as well as property management at the same time, which was headed by the guys who started myDesktop.

Kylie Davis: (09:33)

Yeah, I've seen their stuff. It's very cool.

Patrick Hill : (09:35)

Yeah. Very cool. There are a great-

Kylie Davis: (09:36)

Shout out to the boys.

Patrick Hill : (09:39)

Yeah, shout out to the boys, and they're doing a really good job. So they're smart guys and they'd been there before, and they know what to do, and that kind of stuff. And then there's PropertyTree is underway, but it's been a bit of a slow down in development there, but we're just waiting on the final few end points from them, and we'll be able to integrate with PropertyTree.

Kylie Davis: (09:55)

Cool. So CLAIRE is CRM agnostic? She's not at one...

Patrick Hill : (10:02)

She's not a one trick lady, she can talk to anybody. She's very social, you might say.

Kylie Davis: (10:12)

That's what we like.

Patrick Hill : (10:12)

She likes to talk, what can I say?

Kylie Davis: (10:14)

Fantastic, so tell me more about some of the pain that she's solving in that property management space. Why do we need support like CLAIRE?

Patrick Hill : (10:28)

From our research that we've done, property managers are answering about a million emails a day in the property management space in this country.

Kylie Davis: (10:38)

Not one person doing a million? [crosstalk 00:10:42].

Patrick Hill : (10:42)

That's a lot of emails, right? And they're answering thousands, right? So any one property managing might do 100 emails a day, about 20,000 a year. They would be doing 7,000 phone calls a year, and about 6,000 SMS's. They're doing about 20,000 property management system updates across the entire rent roll. There's a lot going on in terms of transactional, repetitive information, and that's a waste of really capable resources for a business owner. But for the property manager, they're getting worked really hard. So the question is what falls between the cracks? CLAIRE is a personal assistant, so they can move from a transactional management space into more of a customer service, customer relationship space. Where service offerings become better and have a higher service offering. And I think that's necessary for the industry as a whole, but for a property management team, the property managers need to be retained and given a workplace that is not so painful, and difficult, and cumbersome. And I think that the business owner, profits are of very important.

Patrick Hill : (11:46)

In particular Macquarie Bank is reevaluating businesses, not on multitude of revenue but on profitability, EBITA. So they need to look at these things to stay relevant, and stay competitive, and to grow efficiently, operational effectiveness. So they are all the kind of high level things. For the property manager, it's why would I chase the first five to eight days of rental arrears when an AI can do it, and I can spend my time on more cost effective things? Things like giving tenants the ability to talk, and register, and play with their property requests, and needs. With the communication medium that they want to bring rather than what they're imposed to do with a portal or front end, that kind of thing. And at the same time get their needs met [crosstalk 00:12:33] day.

Patrick Hill : (12:34)

Yeah. Get their needs met 24 hours a day, seven days a week, which means that you can have an operation that literally never sleeps and is always servicing your client, and continually improving because it's AI. So there's all those benefits as well. So for the property manager, less pain, less repetition, less of the things they don't want to do, and more of the things they do want to do, which is people oriented type stuff presumably. And that means a transition from property managers being transactional into more customer service and people orientated. So all the things that people should be dealing with people deal with, and all the things that technology and AI can deal with, it does for them as well.

Kylie Davis: (13:13)

Yeah. So I guess part of the ROI as a principal, looking at introducing some of this tech is the extraordinary turnover that we see in the property management space of girls because 85% of the industry are female, and that's not a made up number, that's a real number. Thanks Rockend. So we know that the majority of women are changing jobs in property management every two years because of issues like burnout, stress and just transaction fatigue of being the bottleneck in the middle of all of that communication.

Patrick Hill : (13:50)

You bet. You bet. And the conflict that happens, like if you look some of the data that came out of some government research in the industry that I looked at recently. They were saying that 80% of all property managers rate conflict resolution as a daily occurrence. That kind of conflict is not good for a human being. And so for us, the value is what we give back to the property manager. That's the real value in CLAIRE.

Kylie Davis: (14:14)

So have you've got some case studies or some examples that you can give us of, of what it was like before CLAIRE came on board and then what life has been like after CLAIRE?

Patrick Hill : (14:25)

Yeah, we do and on a modular basis, if you look at things like rental arrears chasing, we've removed about 30% of the full time employee on a 680 strong rent roll. And out of that reduced their total rental arrears on an average basis by 30 to 60%, depending on which one you were talking to and how much they had that process down perfectly before we started. So that's a really good win. There are other case studies that turn around and go, there's a 20% increase in sales conversion for the business develop managers because they demonstrate really high quality service as a result, which meant stickier tenants, which meant less outstanding properties for being [inaudible 00:15:10].

Patrick Hill : (15:10)

So there's those kind of case studies. And then in the first release we had some case studies around the 10 skills that we put in, and that provided about a 15% reduction in total communication requirements by the property managers in that team. We're expecting that that's now at about 25 to 30%, although that's anecdotal at this point. We haven't done a full study on the latest release because it's fairly new. Email AI is coming very shortly, but email AI does the whole 50 workflow skills, and takes care and cues up the response automatically. So that's in parallel AI working with human beings as a collective intelligence as Sarah Bell would call it. I love that slide by her.

Kylie Davis: (15:55)

Yeah. No, no. That's great. So now you're a bit of a serial entrepreneur, isn't it? This isn't your first venture in prop tech. Before you were doing CLAIRE, Realm was doing more of the message app and communication app for the real estate industry. What led to that pivot? Or what's the story behind the two? Are they two functioning together, or how did that work?

Patrick Hill : (16:18)

There are still alerts and integration with the Realm platform for CLAIRE. And so she uses that as a communication medium because she's programmed that way, to be third party integratable. The Realm platform for news, and training, and data updates, they were all done off the back of a, it's almost like a joint venture with the real estate institutes. We got together, we planned it, we understood it and set that up and cued it as being their core communication strategy for the industry.

Patrick Hill : (16:53)

I think that from there it was a natural extension to go to CLAIRE because we wanted to then solve problems, not just facilitate a conversation from human to human, rather we wanted to create operational efficiencies, and true value for growth within organisations that would take on this platform. And to be honest with you, offices that are getting benefit that are 50 rent roll strong, so 50 properties on their rent roll, all the way up to 3,500 at this point. So highly scalable and not difficult to implement.

Kylie Davis: (17:26)

Mmm, and so what made you move from Realm as the REI app towards the AI?

Patrick Hill : (17:38)

I think a natural extension to solve problems beyond the conversation. So if you look at property management, the more we spoke and the more we understood the industry, the more we understood where the problems were, and what the real challenges were for individuals. And me being an ex-psychologist, I wanted to solve things that were causing problems and pain points for the individual's lives.

Kylie Davis: (17:59)

And genuine pain.

Patrick Hill : (18:01)

Genuine pain, right? Well, it couldn't be as lofty as this communications platform like Facebook Messenger, it had to be more than that. It had to solve [crosstalk 00:18:09] main issues. We have a touch, like as an entrepreneur, you want to know the impact beyond the conversation.

Kylie Davis: (18:17)

Yeah. So you guys have recently got some funding, if you're comfortable talking about that because it's quite a high profile investor that you've got working with you guys now.

Patrick Hill : (18:28)

Yeah, you bet. It's public knowledge, so that's the Singleton group. So that was a great addition to our corporate governance, and contacts, and all that kind of stuff. And that sets some extra directions for us, and some extra timelines that we may not have put on ourselves so early on in the piece, but with their support, and knowledge, and capability, and contacts we're able to do that now.

Kylie Davis: (18:54)

Cool. So what does the future hold? What's your road map look like for the next sort of 18 months, two years? What are the challenges that you're going to be tackling?

Patrick Hill : (19:06)

Well, interestingly, a lot of the problems that we're solving within the property management space also translates to other industries. So we're looking at other verticals right now as full SAS platforms, where we're separating out, not even pivoting, just separating out the real estate industry that's tightly integrated with property management, looking at broader markets for those conversational AI pieces that we're doing for property management, and has done incredibly well. And so now we can see that that can then apply to other verticals that the Singleton group is helping us target.

Kylie Davis: (19:38)

Right. So what other verticals? Are you able to say? If it's secret squirrel, that's okay.

Patrick Hill : (19:48)

No, So I think that any industry where there's a one-to-one conversation that has to happen on scale, where there is customer service, and data, and accounts and those kinds of things that sit behind it, they all relate perfectly to property management. So if you're talking about rental arrears that translates to invoice chasing. And there are so many industries that we can talk to in that space. If you talking about solving customer queries against your account, like how much do I owe? What's my job up to? Or what am I doing next? Those conversational pieces can work on virtually any scalable business, provided you've got the back end to integrate to. And CLAIRE was written in such a way that it's a platform, not a product. So CLAIRE, the AI, as a platform can talk to multiple CRM or API integrated back ends. CALIRE in the centre, being the AI, can adapt, and train, and understand all of those spaces.

Patrick Hill : (20:45)

And the front end being, whether it's a communication across Google, Amazon, Alexa, Facebook, email, SMS, you choose the communication device, we can write a front end for it. So all of those spaces... I mean that just lends itself to any industry really. The industry is a bit irrelevant, it's more the experience of-

Kylie Davis: (21:07)

Oh sorry, Patrick. I just lost you there for a sec. Can you just repeat that?

Patrick Hill : (21:10)

That's okay. So it really is irrelevant what industry we work across, just as long as it has some of those elements. When I talk on a front end that's hugely scalable, whether that's Facebook, or Alexa, or Google, or whatever it is, email, SMS, phone. And then the backend being doesn't have an open API that we can talk to their database, and data structures so that we can execute it properly?

Kylie Davis: (21:34)

So a couple of weeks ago we had Sandy Moore, from OurProperty on the show. And he had strong views about app stacking and why he doesn't believe it works. I'm not 100% sure I completely agree with him, but what's your view on app stacking? Are you app stacking?

Patrick Hill : (21:53)

What's his view of app stacking? Because there's a couple definitions of that.

Kylie Davis: (21:57)

Well, he's fee was that you can't stack lots of apps on top of each other, you actually need to almost well garden it and build it yourself, all in one platform, so that you've got control over it.

Patrick Hill : (22:09)

I think that Salesforce would completely disagree with him on that one. I think that every product out there that has a marketplace that's successful would completely disagree. And that's from Microsoft, to Salesforce, to MYOB, to Zero, to any of these SAS platforms that have a marketplace would completely disagree with that.

Patrick Hill : (22:34)

I think it depends upon the apps that you're pulling together. So if you've got a well-written open API, like PropertyMe is very much in the space of, that VaultRE is absolutely in a space of, then you don't need to own the core data source in which you're integrating with. You just need to add value to the end customer and then it becomes a multiple. If you look at trying to own the entire industry and the entire component pieces, that is like I own everything from the beginning when you join, to the data that you hold, to my trust accounting, to every function throughout it, just basic logical will tell you that you can't do everything really, really well.

Patrick Hill : (23:21)

You can do one or two things super well and with high, high quality, but you can't do everything with high quality. So then you cut corners somewhere, and then the question is where are you cutting corners?

Kylie Davis: (23:31)

Yeah. So what does the future of property management look like with digital assist, or with AI assistance like CLAIRE behind us? What's my day going to look like?

Patrick Hill : (23:46)

Yeah, I think that you're going to have this really nice space where the things that you shouldn't have to worry about, you shouldn't have to do heaps of heavy lifting to do, you won't have to do anymore. And look, CLAIRE is a perfect example of that because we can do rental arrears chasing up to 10 days. So it'll continue to chase it and figure out what to do through a conversation rather than a notification, which doesn't get very good cut through because people just dismiss it. But a conversation means that people actually engage and want to be a part of it. And say, "Well, I'm sorry. I'll pay that now." Because they think they're talking to a human. Or-

Kylie Davis: (24:21)

Is CLAIRE doing like the Google hairdresser call on that? Or what's she doing to have that conversation?

Patrick Hill : (24:28)

At the moment it runs on SMS, so it's not a voice conversation. There of course is a roadmap in place that would potentially lend itself to different conversations that make sense in that space. Potentially not rental arrears chasing, but there are others that we're looking at. And even if you look at what Sarah Bell, at GetAire is doing, and you look at the augment of experience of sales calls list, and interrogating data to get to a point where these are my 40 in my call list for today because it makes sense because I hadn't spoken to them, they're in this area, smart data filtering, that's already a glimpse of what we're doing for augmenting AI digital assistant, versus the everyday job of a transactional property manager.

Patrick Hill : (25:16)

And I think that'll just expand, but I don't think that will expand to the point where human beings are out of the transaction, or human beings or out of the service offering that you're providing, it'll just change the nature of the property manager and how they're actually doing it. So there'll be doing people focused, there'll be more phone call, on the phone or internet, there'll be service delivery people, who will be making smart decisions with smart data. And the dumb decisions with the dumb data, and the transactions that they shouldn't have to worry about should just be automated. It should take that load off them, so they don't have to think about it.

Patrick Hill : (25:47)

So an easier workload I would have thought, a more enjoyable workload. And certainly that's the goal of CLAIRE and Realm.

Kylie Davis: (25:54)

And so does CLAIRE also manage maintenance requests, or handling tenders, or booking maintenance jobs?

Patrick Hill : (26:05)

In so much as that we collect the conversation, we understand the requirement, we understand what they're actually asking. We create a job in Vault, or PropertyMe, or whatever integrated software we're with. And there are a lot of software platforms on top of those platforms. So you look at a Maintenance Manager or one of those, they suck job straight out of PropertyMe. So for us, we would have the conversation, automate the conversation, automate the task of taking those details and putting them into PropertyMe as a job, and then releasing that if necessary. And so yeah, it does a lot of that stuff, but we're leveraging already invested software.

Patrick Hill : (26:42)

So where PropertyMe, and Vault, and all those guys have created a good core, we'll integrate and leverage that for the client because we don't think they should waste that investment.

Kylie Davis: (26:52)

All right. And so how long does it take to onboard her?

Patrick Hill : (26:56)

About 10 minutes in total.

Kylie Davis: (26:57)

Oh, no.

Patrick Hill : (26:57)

Yeah. Pretty much.

Kylie Davis: (27:01)

I thought you were going to tell me 10 days, or something, or 10 weeks. [crosstalk 00:27:06] Plug her in and...

Patrick Hill : (27:08)

Yeah, no, no. We spent a lot of time getting that right. So literally it's a three-step integration, where they put in the company details, they put in the billing details, and then they put in the username or password, they click validate, we interrogate the database, make sure it's set up properly, make sure they've got all the details in there, make sure there's going to be no issues whatsoever, and then it goes live. That's assuming that their property management software has been set up properly.

Patrick Hill : (27:30)

Now there are some instances where it's a bit dirty data and we need to go back and say, "Well look, you've probably got 30% of your tendencies that need proper data against their names. You need a few tags in there. We need to understand who your suppliers are." So they take a little bit longer. But in reality, in a perfect world, it's 10 minutes. So the true software is a service offering with an AI assistant behind it.

Kylie Davis: (27:51)

Right. Okay. And from the work that you've done so far with the agencies that you've worked with so far, are you seeing it being... We've discussed that it's going to free up property managers to do more service based stuff. Is that going to start in less jobs in the property management industry or different kinds of jobs do you think?

Patrick Hill : (28:17)

I think it frees them up for different types of jobs. I don't think you replace human beings with AI. I think you make human being smarter and more efficient, more capable and freedom from a lot of the pain points. I think that you make their customers better at self serving through entrenched communication mediums, which is email and SMS, and those kinds of things. And make it easy for them to get services that is instantaneous. I mean the amount of times I've heard property managers turn around and go, "I went out to lunch for a friend's birthday, a colleague's birthday for half an hour. It's the only time I've done it in the last month. When I came back take there was 30 emails saying, why haven't you answered my previous email that came 10 minutes earlier?"

Patrick Hill : (28:55)

So they're under pressure, they're stressed, let's take some pain off because that's really what it is, right? And you need a human being to make smart decisions by looking at a number of sites. We're not there yet. And I don't know that we ever will be. The human connection part of real estate is always going to be a reality and it always should be a reality because as soon as we lose that, I think we've missed a trick. I think there's a space in the market for somebody like Different, who uses a standardised app and it's very structured in what they offer and what they don't offer, and it's low service tech enabled. And so that gives the opportunity for property managers and real estate agencies to be high service, and high quality, and highly capable. Using human beings augmented with AI and better services.

Kylie Davis: (29:43)

Mmm, cool. And so in the future, not just real estate, but looking at other industries where this kind of tech can can go, what else is in your future? Are you looking at going to the US? Or what's the roadmap there?

Patrick Hill : (30:06)

There's a couple of conversations with a few partners that we're talking to at the moment, who either have customers overseas, or there our are new ones that we're talking to in the UK and the States. And so very much within the next six months we think that will be overseas.

Kylie Davis: (30:24)

Right, but I guess your biggest impact is likely to be making renting great again. And the risk of...

Patrick Hill : (30:35)

Let's hope so. Well, look at some of the complaints that come out of property management, a lot of them were around the timely response to queries, questions and issues, even if that was on email. Now, if I had an emergency, I wouldn't put in an email, I'd make a phone call, or I'd send an SMS, or something. I'd have something that's a little bit more responsive as a communication medium. But often, 80% of all communication, this is the data that we got out of a number of our trials, 80% of all complaints that we saw documented could have been avoided through timely and capable, responsive, relevant capable communication.

Patrick Hill : (31:06)

And if that comes out of an AI first and his augmented with human beings, or vice versa really, then that's a smart outcome for tenants and property managers. It means that there's an assistant in there that makes life easy, and pleasurable, and responsive. Compared to the overworked and playing triage every day property manager.

Kylie Davis: (31:27)

So Patrick, it's been fantastic talking to you. Thank you so much for introducing CLAIRE to us, and explaining how she's going to make renting and managing property a truly pleasurable experience again. And so thank you so much for your time. Long may she reign.

Patrick Hill : (31:49)

Thank you so much. I appreciate it.