Tyler Smith was 19 when he went into real estate. After selling his first home, he was amazed at how much money there was to make. After eight months, he had sold 15 homes and was already making more money than his friends who had attended college. That’s when he decided to go all-in, double down on his referrals and build his own business.
Being ultra-competitive, Tyler always felt the need to be around better and more prominent people and soak up as much advice as he could from them. And what motivated him the most was proving people wrong - especially those who believed he would fail.
Tyler became hugely successful through a referral-based business. Yet, he found glaring inefficiencies in the administrative side of real estate. Thus, he created Skyslope, his transaction management solution that keeps tabs on real estate transactions to promote a paperless system.
Today, Tyler Smith is the Founder and CEO of Skyslope. His achievements have earned him numerous accolades, including being named one of REALTOR Magazine's Top 30 Under 30 and one of the Wall Street Journal's Top 250 Teams. He is also considered an industry expert and innovator dedicated to helping Realtors, Brokers, and entrepreneurs achieve their goals.
03:34 How his bad experience as a first-time homebuyer inspired him to become a Realtor
07:10 The life-changing moment that took him from a naive agent to making it big in real estate
17:32 How Tyler ended up in REALTOR Magazine’s 30 Under 30
20:05 How Skyslope came about
30:33 How Tyler got national brokerages to use Skyslope as a required system for their business
35:12 The story behind the Fidelity merger
41:13 What the next five years in real estate look like?
47:23 Who will be the true winners in the future in the real estate space
48:58 Why Realtors should focus on how to provide value to consumers
49:37 Tyler’s one advice to Realtors
Brian Charlesworth 0:35
Hello, everyone, and welcome back to the Grit Podcast. I'm Brian Charlesworth the founder and CEO of Sisu where real estate transacts Online and today I'm here with a special guest, Tyler Smith. If you are in the real estate industry, you probably know who he is. I know he was a badass real estate agent at one time. And now he is the CEO of Skyslope. He's also the founder of Skyslope, but Skyslope has since been acquired by fidelity. So he's had quite a journey in the real estate industry. And I'm excited to learn about that today. Tyler, anything you want to add to that?
Tyler Smith 1:11
No, yeah, just I love real estate. I speak real estate to the language I know better than English, usually. So and then I transitioned a lot of that to tech, so excited to talk about the journey and, and real estate and technology. And we could talk about the acquisition as well, that that makes sense coming up on five years. And yeah, I'm just here to provide value excited, excited for the discussions.
Brian Charlesworth 1:34
So I'm excited to have you so let's go back in time. Like, how did you get into real estate? What did that simply if you'd never gotten into real estate, you wouldn't be here right now. Right?
Tyler Smith 1:47
Yeah, I was. I was 19 going on 20. I hated living in my parent's house. I was like, Man, I'm not gonna pick up chicks living at this house with my mom and dad. So I'm gonna buy a house. They're giving loans to everybody. I worked at a restaurant called cattleman Steakhouse. I was a server. And I was slinging steaks. You grow up in Sacramento, California fact. Okay. So joined was a server at a restaurant and said, Hey, everyone's buying houses that can't afford them. I'm gonna buy a house that I heard I can get a loan and they loaned a 19 year old $240,000. And I'm like, This is crazy. Like, they're gonna give me this money. Not only that, it's like 105% financing. They're gonna give me money to buy a house like, this is the greatest country of all. Like, everyone should move here, this is awesome. And my parents are like, you're gonna foreclose, you're gonna fail, it's not gonna work and, and I bought a house and through that process, my realtor back then, which is very customary, my realtor was my lender. You don't see a lot of that now. But back then it was, very standard because they are double-dipping. It was a hot market. Everyone's gonna love everyone who's a realtor gotten loans because everyone needed a loan, and everyone can get loans, right? Everyone who was a lender got into real estate because everyone was buying so they're double-dipping. But my, what year was this? This is 2000 and right before the crash, so 2005 2000
Brian Charlesworth 3:23
Tyler Smith 3:24
you know, it stated income, get alone, I bought a house, and my realtor was like, not great. And it was my lender, and I moved in and I'm thinking about it. I'm like, 19 I just had my birthday, I moved into the house, I just had my wisdom teeth pulled out. I can't move and I'm like, There's no hot water, the dishwashers broken. And I call my mom and she's like, did you get a home inspection? I'm like, What's a home inspection? You know, just well, it tells you what's working. And it's just like, well go check your hot water heater and like, where's my hot water heater? Like, and so my real tour slash lender did not do a good job. And I know that she made $13,000 on this deal. And so in my head, I'm like 13 grand if I had 13 grand and um, that's down 20 I'm a millionaire. My mind like holy cow. 13 grand like, my buddies are working for 12 bucks an hour like yeah, right to make 100 150 bucks tonight serving food. So I literally called my mom I said, I'm dropping out of college. I love you. I'll pay you back one day, but I'm out and I'm going to get into real estate because I got the worst move ever. Oh my gosh, you're like a sales you're like a car salesperson. I like it was like the worst the worst. You're gonna fail to like yep, whatever. I'm out. And so I got into real estate and my first year I sucked it was horrible. I'm like, I grew a beard so I looked older. My I spent way so much all this time on my business card. I literally throw business cards on the ground everywhere hoping people would pick them up. I was so naive. The business that I'm in real estate I business cards. and people are gonna call me do because they're going to buy houses through me and my phone never rang like, and that's when I was like, Okay, I gotta really changes. So my first I sold one home. It was to my at the time girlfriend's father. It was like a $560,000 house. So I made like $18,000. And I was rich, I was like, my friends. I literally sold one hole, but I got more money than them. I have so much money, I spent literally five grand, like on the dumbest stuff because I didn't even know how to manage money. I was like, in my mind, I was rich. And I didn't even think about taxes and like, what a tax, like I pay taxes on this. This is like I got the money in my bank. It's mine. Like I was like a dumb kid who didn't know anything. And so that's how I got started into real estate. But that was literally your one of like naivete. Just going out there and getting lucky and making money.
Brian Charlesworth 5:56
That's a great story. My wife runs a real estate team. And she has like 40 agents now. And a lot of these agents like this is their very similar story to yours, right? They've been in restaurants. So they've been whatever, but they've never made over $30,000 a year. So they come in, and all of a sudden they get five homes under contract. And those go through and you know, they're making, let's just say they make 2530 grand. Or they're on a team, they're getting team splits, right? And all of a sudden, like, these guys have no motivation. It's like you would think you think that would happen? And you'd be like, Oh, wow, look at this, like, I know how to hit the jackpot. I'm just gonna go all out. Right. And, and so often they're like, she's upset for a year, right? I just made more than I've ever made in a year and one month. Yeah. So. All right. So I've been told and I think it was Josh Smith that told me this that you Josh and Tim, Ohio, I believe. We're all in 30 under 30. Together, is that right? Yep. Yep. Okay, so tell me, how did you get from the point we just talked about selling one house to there?
Tyler Smith 7:10
Yeah, so a regular that I had at the restaurant. They were in real estate. And I always took me a lot of money and their realtors. And they're always like, hey, you know this and hey, you know what I want to buy or sell and they're the ones who said if you're going to be in real estate, this is what you need to do. And they refer me to the coaching company. Brian, Fenian company but Fenian CO and I'm like, this is like Irish dude who's like talking all this stuff at one stage, Mike, like, we're gonna actually, like, support you and pay for to go through to get to that great. And I'm 2120. You know, like, I'm younger. They looked at me like their child. I'm like, alright, I'll go to this thing and Monterrey. And all right. And I went, like one of the guys super interesting to watch and listen to he's seen all the good things are hitting me and liking. And he's, it's resonating. Why do I want to cold call Dornoch, and I want to work by referral, right, like, and so I was like, I know myself. And they talked about budgeting, and I knew myself was I need accountability. And I always have a chip on my shoulder to prove people wrong. And so I said, Okay, I'm gonna join this, and I'm not gonna join one month, because I quit. I just know me. So I'm gonna put five grand on a credit card that I don't even have. So it costs five grand for it. I remember that here. Put it on there. So I'm committed for a year, I'm gonna give it a year. And they're saying that they can help me produce a lot more. If they can't, then I'm out five grand, and if they can hit the jackpot, and that's when I got a coach and I did a heritage profile that so they know how to coach me and who I am. And it was a life-changing moment for me because I didn't get that as a child I didn't who gets coaching who knows what their tickers are and what works? And then who has accountability? It's like, Hey, you said you're going to do these things? Did you do my new calls happening every two weeks? I'm like, oh, I haven't done anything. I better do it all tonight, because I know I have to do it. And I needed that. As a kid. I needed that guidance. I needed that discipline. And once I saw results, when I see results, I 5x Down 10x Down 15x Down. I'm like, ooh, that worked. Shelly gave me a referral. And it worked. And I made money. Let me do it again. So I went from selling one home the first year to joining coaching my second year, not even a full 12 months, eight months of coaching. And I sold 15 homes. So I thought I was rich. At year one, I was a millionaire in my head year two, right? I was like, my friends are going to college and I'm speaking I'm like this is crazy. And so from there, I doubled down on the on the prospecting and I I built up a business, then the market hit and it started to go down. And I'm like, Okay, I still have referrals but I need to get into this short sell game of this REO game. So I built that out loud. I use the same things they used on clients. To get referrals, but in the bank loans where I was one of the top guys for letting loan services and Goldman Sachs and at the time Countrywide, that's now Bank of America. I did the calls the notes, the pop buys to these banks, not to clients and banks. And then I would follow up and I had a whole system. And I put all these things in place. And it just kept, I was literally doubling if not five, Exene. In some years, my business and where I was selling with the team over 1000 homes a year, two years in a row. So wow, 30 to 30, came probably at the 400 500 unit range deal, probably like my fifth year, fourth or fifth year. But I was just doubling down and setting up processes, I was really good with processes. I was really good at managing employees, I only had four employees, all the restaurant independent contractors under my team. But I was really good at that. And I think that's why because I didn't focus on the bad stuff, I focused on what mattered the most. I'm only limited to my time of how many homes I can show our home, how many homes I can list, I need more people under me that can do that. But I'm really good at building relationships with the people that matter that can give me these homes at quantity. I remember I got a call one time from one of my asset managers said, Hey, I've got an agent who's dropping the ball. He's got 36 properties, can you take them? And I'm like looking at my assistant Jennifer at the time. And she's like, No, we're busy. I'm like, yep, we'll take them. And like, overnight, I got 36 properties, you know, and now I'm listing those, I'm going into doing my own and it's work to do all that. But in one thing, because they trusted me. I got 36 properties. And then I said, Hey, I did a great job for you. Who else do you know in your company? Or who else do you know in the industry like I asked for the business because I provided a value. And it blew up really quickly. And then what I did was when I double N and buyers would come I took all the buyers deals that we did and I built relationships. Hey, you just close the deal with my buyer's agent Jimmy, we are going to stay in contact with you. I'm going to follow up with the quarterly and I followed up. I would literally call Hey, how's the house going? I know Jimmy's been talking to you. But I want to know how's it going? what's working, what's not what's going to do a service. Because I knew that eventually that buyer's agents not going to do it or they're going to go away and I'm going to build rapport. So I was a machine. I mean, and I'm not promoting that for people. Because I mean, when I was young, I was single and but the outside world almost didn't exist. You can ask my friends like Tyler didn't exist for three years,
Brian Charlesworth 12:29
Like, sure. Yeah, you were all in the real estate. You are one of those guys that found the jackpot. And you're like, I'm going for it.
Tyler Smith 12:37
Yeah, like literally like my friends. Like we didn't even we couldn't even we thought you died. Like we couldn't even get a hold of you. We couldn't text you. It was like you didn't exist. Because I didn't show up to anything. I worked seven days a week, every day, 1214 16 hours. And it was like, we were making money. My team was making money. My assistants, my assistant made like 250 grand, and no assistants make that right. Like, I'm sure getting bonus on this deal. So it was like, it was like the wild wild west man and I saw the opportunity and I said hey, this is what I'm gonna do it. I'm all in.
Brian Charlesworth 13:13
Okay, so you didn't go to college? If you're selling those kinds of homes, I mean, you're making well over a million dollars a year. Right? So you said something interesting about your parents, your mom telling you, you know, you're gonna fail. Don't do this. Don't do this. And you talked about having a chip on your shoulder. Do you think that's what you have a chip on your shoulder that hey, I'm in a prove that I can get this done?
Tyler Smith 13:37
Yeah, I'm ultra-competitive, like, super competitive. I'll give you a story. At the time, I was with Prudential California Realty. Then I left and joined Keller Williams. And I was number one in Prudential. I said, Hey, I need to be around better and bigger people. Otherwise, I'm going to get complacent. So I'm going to go I'm not number one, it'll push me to chase to be number one. Cuz I'm competitive. That's just how I am like, my dad played a little bit of pro football. My mom, you know, raised us while he was always gone, working and doing his thing. And so we just come from a competitive family. I had a brother that we're less than we're 12 months and 10 days apart. So we're like twins, pretty much. So we're competitive. And it's only two boys. So I went Kela Lorenzo's number four. And I said, Hey, I want to go take the number one, two, and three people out to lunch and pick their brain. I want to talk to him, you know? So I do and remember this gal, I won't mention her name. And she said I'm number one. And I said I want to go to lunch do she goes why don't I go to lunch with you? Hi, oh, why not? Like, I'll share my tips and tricks issue yours. Like we're competitors and like, one of the same markets but like, this is a really big market. We're three counties here in Sacramento, California. Placer County Eldorado like, I got a lot of realtors girl, and she's like, No, I'm not gonna go to lunch with you. And I literally went back that day to the office. I told my team, we are going to double her numbers like never gonna happen. And at this point where I think we're probably doing like 250 big deals. Me and one buyer's agent and an assistant like It's like we got we're gonna have to put in work to do this right. Am I like why don't we just put up set a goal to beat him right now we're going to double her numbers. Like, it's impossible I said if we double her numbers, I'm gonna fly all of us out first class with the spouses, all of us to Maui, stay at the Four Seasons, we'll do the whole deep thing, full eight-day experience. So they're like, Okay, well, that's interesting. I sit here and put up Maui, I'm gonna freak and we're gonna play Hawaiian music in the morning, like the whole deal. Every morning, we play Hawaiian music like we I brought in hula dancers every month, just like I the whole entire thing. We doubled our numbers by October. So when I think about chip on the shoulder, I'm ultra-competitive. But I also like to just, I like to win. I love to win. And so maybe that comes from my mom. You know, she still says today. It's like, oh, you're getting into real estate. That's horrible. It's like, oh, you're doing technology all it's the worst thing possible. You didn't go to college for technology. Like you're talking with fidelity. That's the dumbest thing in the world. I'm like, I'm like, I think she'll say it for the rest of her life. And it's great maybe
Brian Charlesworth 16:10
Has she ever admitted that you've made a good decision?
Tyler Smith 16:13
She loves first off if you talk to her mom, she'll brag about me to everybody. I mean, yeah, our neighbor one time said like, Don't you wish your son was doing something better? Like an attorney or a doctor? And she said, like, you'd have to take a pay cut for that. No way. I would I want that. You know, like, so she, she hypes me, but she's just a tough, we haven't very tough love Mother relationship. But I mean, literally every single monumental milestone, I can say, oh, yeah, my mom's like, that's not gonna work. You're gonna foreclose? Oh, it's the worst. Oh, my gosh, technology, you don't even know you didn't go to college. Like, I can go 25 stories on that.
Brian Charlesworth 16:47
It works for you. Because you're so competitive. You want to prove that you can do it. A lot of people would cave. Right. So that says a lot about your character?
Tyler Smith 16:55
Well, there are pros and cons. I think I look, my wife doesn't do well with that type of tough love pressure. Yeah, it doesn't work well with her at all. My brother, it does not work well with him at all. So I think you have to find, I think I value my mom for knowing that probably the pitch I needed to do the things I've done. But it's not for everyone. Everyone has different motivators. For me, I like to prove people wrong, that I can do things and that's inspiring and motivating for me. And it makes it keeps me humble.
Brian Charlesworth 17:23
Yeah, love it. Alright, so you move over, you become a top realtor. Yep. You get let's talk about 30 under 30. For a minute, how did? How did that come about? And
Tyler Smith 17:36
A lot of people ask about that I can give you first off, I think it's a great award to get. And I applied three years in a row. And I didn't get it for the first two years. And I'm like, this is comical, in my head, young, naive, little bit of an ego back then I'm like, why am I not getting this? Who's this person in here? And so again, so I do what I always do, I said, I'm going to call every single person who's made in the last few years, I will take my call and pick their brain on buying lunch, my son in the handwritten card after I'm going to send love a nice bottle of wine, how'd you get in hydrogen? And there's a common thing it was, you have to understand. Your numbers aren't just enough. Like I'm crushing everybody in here. Like your numbers are not enough. They're not getting their marketing and branding company, their magazine, their publication? What makes you stand out? Why are you different? Why are you unique, you can't just go off of because I'm looking at the numbers I'm doing, I'm killing it. They don't care about that. They want to know, what do you bring to the table for the readers and listeners that help? And so I shifted my entire application. And I got in like that like I have a whole I did a whole blog on it too. Because so many people are like, How'd you get in and like, I'm just gonna, like write it all out? So you can have it, because that's what they're looking for. Yes, you have to have the numbers. But if you look historically, sometimes like this person said, like 4 million rep volume like would be your 25 million in volume. Now different markets are different. But you'd expect like this is like the ballers list. And it's not always the ballers list. And I think that's I think Gnar did a great job at that. Because we can all look at the ballers list, it's ranked the Wall Street Journal. It's all in rankings, right? This allows you to see some of the things that are working. And I think for the readers, it allows you to expand. So that's how I got in. And it was a great thing to say him one of the top 30 under 30. You know, that's great. I have clout and it was fantastic. And I used it as much as I can. But at the end of the day, you know how it is I can say I'm with ABC brokerage today. The clients can do business with who they want to do business.
Brian Charlesworth 19:39
Oh, yeah. It's not going to affect clients working with you. It's yeah, my wife, I think I believe my wife got that the year before you guys got that if I'm not mistaken. So it's interesting to me that you and Josh and Tim, we're all in there same time because you've all come out and done some pretty incredible things. So it's fun to see that and that was Josh that took mean that so you're at this phase of your life? And how did this thought come about to start Skyslope? Like most people crushing it in real estate, they stay in real estate, and most people in real estate that tried to go do something else fail, right? I mean, as far as a tech company, I mean, there's been a lot of realtors tried to start tech companies and they have not succeeded. So like, how did this all happen?
Tyler Smith 20:25
Yeah, it wasn't by design. So I learned it's so funny. You think about now the market we're in and everyone's like, Oh, my gosh, offer management. And we have offer management because there's so many offers. But I built offer management literally over 15 years ago, on a WordPress website, because I had so many offers coming in, and I built it for myself. So I went into SharePoint, I built a landing page, I made it look pretty. And it was literally like, if you want to write an offer, I want to Tyler's off houses, putting the address, putting all the data in a webform, upload your purchase agreement and your pre-approval or fax it, it had a fax number there. And I will review your offer. And if you don't submit it this way, it will not be looked at. And I built that 15 years ago, obviously, that was in WordPress, after a while it broke. And but it was for me to organize offers, then what happened was I wanted to open up a port on the back end. So we can look at it and compare them to see which ones are the best because we're getting so many offers back then you can imagine, obviously, the market shifted, not as many offers. And I said there's got to be a way to store these files. Like I have so many files, I have my file for this property, my sister has her file that we have our transaction coordinator who has her file, the three files in the office at the end of the year. None of them are like a mirror image. And we're storing three files at the end of the year, of every single property itself. So you sell 400 homes, you have 1200 files, you sell 1000 homes, you have 3000 files. So I had warehouses of these files, because I was fearful that, hey, I'm doing so well I hear about all these lawsuits. I don't want to have a lawsuit not have everything that we did everything by email, you could imagine when you're doing even in like the reo, short sell market, you have consumers that may want to sue you because you're not representing them properly in the short sale market or even Arios. It's like, Hey, I sent an offer and tire that was higher, I saw it closed for lower, is there something weird going on. So we did everything by email. So we have some of these files with like 4550 email stacks, you know. And so I said, There's got to be a better way to manage this. And so I looked at all the platforms out there. They weren't great and couldn't serve what I wanted. I had really three big needs that I wanted. And not all, not one of them had the big three names. So I built at the time wasn't even going to be a business, it was called Smith, Premier properties, portal inc.com. I thought Mom, I've got a domain, it has our name. And it's so cool, which shows how naive throughout this entire journey I am I'm still naive 10 years in software with real estate, but I was like I got a cool domain and has our last name. This is awesome. And Mom, it stores documents and it's for me. And so that that was called version one. And it worked for our team. And eventually, you have the top producers and the 30 to 30. We all pick each other's brains. We all share ideas like what do you use in a manager files and Mike Smith properties poorly calm. It's like the coolest thing ever. You got to try it. And I would open an invite this to all these users for free because I was like, Hey, these are my buddies, whatever. And they're like, it'd be cool. If I had this. I'm like, wow, that's a great idea. We should do that. It'd be cool. If it had this mic. Ooh, that's a really good idea as well, at the time, I built it over in India. And then I hired a couple in house developers because the India team couldn't move fast enough for me. And I had a little feedback thing, which we still have today at Sky. So it says you know, what would you like us to do? And back then they would say this, it go to my team. They go what do you think I love it, do it. They build it and be the new Skyslope feature? Or Smith premier properties feature? At one point, I had probably, like 30 users on it, not much. But I'm like, these are like all heavy hitters, like, I don't know a ton about technology. And I've got this really good bank machine over here called my real estate business. If this technology thing, this is like when the clouds like it's in the cloud, like where's it out? I'm like, it's in the cloud. Like, where's that? Like, I don't know, but it's in the cloud. Like, it's somewhere in the cloud. I always thought like, what if the cloud breaks? What if like, it starts raining or if there's a storm? You know what? I don't want to be reliable, like liable for these forms and documents. So I said, Let's separate it out. And let's create a company just so we protect ourselves legally. But the only reason Skyslope was a name today was literally to protect myself legally because I had a really good entity over here that was generating cash flow. And I didn't want to ruin it with this. I have an email still from that year where Jennifer I'm like here like something in the sky with clouds because you know, everyone's talking about the cloud cover. A couple names. She was like, here are 10 names. What do you think? Am I, ooh, this one looks cool. See if the domains available, like literally email chain back and forth, like, what's the name, and I'm like, guys, this was not going to be a business. This was literally for myself and some of my top-producing buddies. And so the beginning, that's how it started. And it was for teams. And then I was like, to my broker, since I had leverage because I was doing really well, I said, Hey, I'm not gonna keep printing this stuff out and turn it into you. And by the way, your process is broken, I think I can fix it. And you could audit files a lot faster, and I could probably make you more compliant, because people aren't turning in their stuff until after it closes. And then you're telling them what's wrong. And then they're going to the seller and have them sign things with a date post-closing, that is a red flag and scary to me as a broker. So then I built out a broker VIP version. And my broker is he's like, this is awesome. Let's get this across all of our agents. And that's kind of how it started. You know, we started with that, as my first broker, one of the top producers in Arizona told their broker to use it. That was our biggest and first client still a client today DPR Realty, 2000 agents. And I think they're paying, they're paying like 30 cents a user at the time. You know what I mean? Like, I'm like, I'll do anything I might, someone wants to pay me monthly for this. This is like mind-blowing, like, and that's kind of how it happened. That's how we started it.
Brian Charlesworth 26:32
Yeah, that's cool. So, so that was about 10 years ago.
Tyler Smith 26:35
Oh, yeah. So Skyslope corporated for 10 years, this is our tenure or actual in 2022. Now, it's our 11th year this year.
Brian Charlesworth 26:42
Okay, so how do you make the move from this thing for your buddies in you, that's having an impact on your business, you get a few customers that start paying you. And now how do you decide to make that shift, and then go all in because I know, I already know that you were told you'd never succeed to doing this.
Tyler Smith 27:03
Yeah, it was, um, it was very uncomfortable. But I do well, in uncomfortable places. Because I have this really great cash cow and my team, obviously, you have to induce competence to your team, they have to know you're committed they have I mean, you're they're there a lot of the reasons for money, but also for you as their leader, within any company, let alone real estate. And so what was great was I set up these processes and procedures, I had a really good system set up like people were incentivized to do things, those things I knew that they had to do would only bring in more business and referrals. And so it was like a machine. And so Jennifer, at the time, who still works for us today, she was my assistant, I said, Hey, I'm gonna make you the manager comes with a pay raise, but you're going to need to, I'm going to be away from the desk one day a week. And I need to see how you roll with it how you do it. And one day turned into a day and a half turn into two days turn into she fully transitioned it. So it was still making money. And was great was that money, I needed to continue to fund Skyslope. And so what we did was she I took one day away, and we hired our first employee, Ryan Bishop, who's now his senior product manager here. But he was like, What am I gonna do my everything I don't know, I don't know what you're gonna do, I don't want to do but we're gonna, like we're gonna do it like, or we're gonna, we're gonna figure it out, we're gonna figure it out. And we were just like, I'm like, I'm going to sell and close the deal. And what you're going to do is you're going to onboard them, and I'm going to show you how I would onboard them. And I'm going to teach you real estate. And I think you know, this like, going from just like a standard common sense. Talking real estate language is very different. And realtors, once they see a sign of you don't know what you're talking about, like, they'll exclude you and you're dead to them. And so, you know, even today, we have an entire real estate boot camp program. It's very intensive that before you even do anything, you do that first because we know that realtors and brokers want to know that they're talking to their own kind, you know, I can't hire realtors and brokers that probably work. So how do I hire folks? And given that perspective, and so, back then we hired our first employee, no, we brought on Jesse, who's still with us today. And from where we built the team, and we built out a sales team. And I brought on a CEO and he said, Hey, I'm gonna take care of all the sales and run the team. You take product engineering, and let's conquer. And that's what we did. And what's nice is Jennifer ran that real estate business really well until we sold that business, we're able to actually sell it because if it had I mean, I'm like I'm not even involved in this is the type of money it's bringing in and, and I want a referral fee for three years plus, I want a lump sum upfront and blah, blah, blah. Because sky slope just I saw the true value of it. And it's been a tough road no doubt. I mean, software technology and real estate is tough. I mean, look at just tons of people trying to disrupt it. Pros and Cons people going out of business. It's a hard business, you know that. But that's the transition for Real Estate over I mean, it was a transition. But I did so well in real estate that I had a nice cushion, I could have failed and not done real estate for some time and done still pretty well. And I funded the company myself. So I didn't take a salary for seven years and skies as writing checks the first three and a half years of living writing checks, like, oh my gosh, I hope this pays out. Because I'm like burning a lot of cash you're going to be.
Brian Charlesworth 30:23
Yep, totally, totally get that done that many times. Yeah. So you know, somehow. And Tyler, I'm not sure how this happened. But like you guys, were able to get a lot of like National brokerages, franchise ORS to come in and say, hey, you know what, I'm going to require that all of my compliance is done through Skyslope. So if you're going to be part of our company, you have to use Skyslope. How did you do that?
Tyler Smith 30:56
Yeah. So I think there's a couple of things that worked in our favor. I think one, my real estate background and me relating directly talking with these brokers was very helpful. I knew real estate very well, I knew the compliance side very well. I knew the lawsuits that my broker had gone through and lawsuits that were like out in the general that was happening. And I said, like, you wouldn't have multiple sets of QuickBooks. You wouldn't, you'd have one. Yeah. So why would you what, like we're in this new world where it used to be agents would turn in paperwork, and you would do it all paper. So there are three things one, I can reduce all your paper costs now. But think about that, in today's world is like foreign like I wrote a book called going paperless. That's not even relevant. It's not relevant anymore. Like it's irrelevant, because who's not paperless? So if you think about it, like it went from, I can save you money on fax machines on fax ink. On paper, I had a calculator on our website at one point that calculated the savings, storage costs, like, we are so much less expensive. Further, we allow you to expand. So you can centralize all your offices into one processing system. Because we can audit faster. Think about it, if you're an auditor, you grab your paper, you're getting paper cuts, you're going through them, you're making copies, you're then putting it in the agent's inbox, it's hard for anyone to even think about that. Unless they've been in real estate for a long time, like the rookies that are listening to this, they don't know what I'm talking about. But it was the worst process in the world, like, this is what happened, I had to literally go get all these forms signed, and I pull them out of a file cabinet. I filled them out hand writing, which I had the worst chicken scratch in the world, I then if they weren't carbon fiber, right, that the carbon fiber days what if they weren't, then I would go and get them signed, none, bring them back, I'd make a copy of every single piece of paper, I then turn it into my broker, and it would sit there in their desk until their auditor audit, the auditor would have to come into the physical location, audit the file, tell me what's missing signatures, and what's wrong, make a copy of that. So she has a copy, and I have a copy. And she put it in my mailbox. And I'd have to drive that down to the office to get what was missing in order to get paid. It's like the worst process. And no one even thinks about that. Just like we don't think about taxi drivers anymore. We think about Uber, right? So that was the process, it wasn't a hard sell of, I'm going to save you money, I'm going to make you more compliant, you're going to make this as your centralized hub. And by the way, if you have multiple offices with multiple auditors, you could not you don't need them anymore. One person can do this. So it's gonna save you money there. And I guarantee your agents are gonna get paid faster. And this is the future. And they would say like, no, no, no, we don't want to make it mandatory. I said, I can tell you this is built from a realtor's perspective. It's so easy, this is easier than the process they're doing. I guarantee it'll resonate with them. And once you get one big client, great examples. DPR, they were the largest at the time and Arizona. What do we do? We went to all of their competitors, said hey, Keller, Williams DPRs. Using the system, you're gonna want to see it agents gonna love it. They're gonna use it as a recruiting. So think about it back then it was you can recruit? Because why wouldn't you want to be the digital broker? It's new. It's fun. It's exciting. So that's how we did it. Obviously. Now you can't go hey, we're using sky slope. So you should use it. That's not a value prop to realtors anymore. Right? Yeah, right back then it was massive. And so once you get some of these, what I call anchor tenants, the Nordstroms, the JC Penney's, the Macy's, etc. Dude, I mean, I'm telling you, it just it opens up the doors to so many other things. It's the land and expand model.
Brian Charlesworth 34:43
Yeah. So I love it when people see a problem, and they want to solve that problem for themselves. And those are usually the businesses exist succeed, right? The only way I started Sisu I saw I helped my wife built her team solve the problems. And I was like, we absolutely have to bring this to this industry. So very similar, just years behind when you guys got started, so I would love to hear a little bit about the acquisition and how that came about.
Tyler Smith 35:16
Yeah. So obviously I funded the company myself, we were obviously cashflow positive after three years. So this is now year 11. It'll be five years in October with the fidelity merger. So we're now entering around year four or five, call it and I'm sitting there, and we're getting a lot of inbound interest from private equity companies, you know, venture-backed companies strategics. And I've always said, Hey, let's keep in contact, like we're heads down grinded, we're heads down grind, and we're heads down, right? And this one company came to us and I was like, hey, these guys have been I've been talking for a year and a half. I like them. They actually, they've given me a lot of tips. So but my goal was like, what can you bring to the table other than money, like, and they'd give me some suggestions on my money, they'll see if those work and I go apply them? I'm like, Whoa, we increased revenue, or have you looked at this? I'm like, No, I haven't. And so I'm like, eventually, I just private equity. I was like, Dude, we've given you so much ideas, and your revenues increase. And so we're only given you, you've seen what we can obviously help you with. And they were right. And so we got into it, I said, Well, I don't want to sell the majority. I'll take some chips off the table. Sure. And we'll do minority investment in let's roll. And I'd love to work together. And then I had a really good relationship with Chris Gough GCA, which they just did a merger now with, I don't know the new company, but he's like, Hey, you got an LOI, you should run a process, there's several people who'd want to help you in this. Like, I don't know, I gotta pay you like a broker like, and I got to focus on my business. And I think we can do better and you have nothing to lose, let's just look at the options. So we ran a process, the intent on that was, let's, let's, let's de-risk a little, let's sell a minority, let's pull some chips off the table. And let's then put some money on the balance sheet and freakin sprint. And throughout that process, obviously, we had several private equity companies that are interested, we had three strategies as well, one being fidelity. And we sat down and we met with them. And I was like, I don't want to sell the majority. And I said, here's what's important to me, at the time, we went to Montana and met with Bill and the entire executive team, I said, important to me as like, we believe in our vision, we still control our destiny, our culture remains the same. And we get to make money. He's like done, like, make it happen. Like we want to control you. And we want you to run we like to be who you are. And, and, you know, we're gonna let you do what you want. And that still stays true today, like there's no interference, we've only enhanced us they've only helped us grow. I mean, they got sales, execs, you know, pitching our product out in the marketplace, just not pitching but like making introductions for us for things like there's a lot of really, really great advantages. But the main part is they stay in their 8 billion $14 billion lane, and they let us run in our art lane, and they're there to help and guide and support. And so we did that deal. It'll be five years in October. And it's been fantastic. We've grown obviously, tremendously at the time we were doing, you know, we had maybe 100 ish employees, we'll have we're hiring, you know, 51, this year 38 of those a product engineering. So we'll have, you know, 260 employees this year, revenue has gone through the roof margins been fantastic. They've taught us some ways of how we can improve margin and certain things. But really, they're just a support. They don't, they don't expect that we're good operators. I'll say that. I think if it was opposite, it'd be a lot different because they've made other acquisitions or they've had change management and things like that. But, you know, it's been a really great, great, great partnership. Yeah. And
Brian Charlesworth 39:00
That's great. I didn't know you guys had actually run a process. But it's a fun story. And congratulations, I mean,
Tyler Smith 39:07
Career process. I think it's fantastic. I mean, not to get in the weeds that but I think in this market or in a market like I will tell you, I get paid nothing for this but Chris's office is insanely amazing. Like I learned more from that than I probably learned in the last 10 years. And it wasn't from the processes or from how really intelligent people I remember I got out of college I'm smart enough to do the hard work and I'm smart enough to build stuff but there's with true intelligent intellect there comes a whole nother realm of things. And I learned so much that it was literally like I got my master's degree in how to talk about your company how to pitch a company how to sell a company how, how to present a company it was it was the best that was the best experience I've ever been in any stressful right? It was the best experience ever if you manage my emotions, my expectations and taught me along the way, it was super cool, like, super cool.
Brian Charlesworth 40:07
That's great. I know Commissions Inc's random process as well.
Tyler Smith 40:12
Were with the same company actually with Chris Goff
Brian Charlesworth 40:14
Oh, did they use him as well?
Tyler Smith 40:16
Yeah, so Commissions Inc. Part anyone been involved? They did a deal with Ceren capital. Sara capital was actually a contender. When we ran our process. Sara capital took, acquired I think the majority or the minority did a lot of work internally built it up. And then they ran a process with Chris Goff and that's when they sold to Fidelity.
Brian Charlesworth 40:37
Hmm, interesting. Yeah.
Tyler Smith 40:40
Chris Goff, if you're in real estate, and Takis, these, if not, number one, the like the top guy who does it like, but yeah, they were also that and that's what he told me like, hey, we did this with see this is kind of what we can do with you. And he had some home runs already that showed what he could do with us. And he did exactly what he said he would do. So that's great.
Brian Charlesworth 41:03
Alright, so I'd love to get your perspective. And we don't have a lot of time left to think maybe 10 minutes. We've actually we could stop now. But it's been great. I'd love to hear your perspective on where's the industry going? Yeah. So what are the next five years in real estate look like?
Tyler Smith 41:20
Yeah, I'll start with this. And this is what I said in my company. If you think about it, if you look at the last decade, all personalized to everybody. Let's just not even be real estate. Let's just think in like, our human world society today. Coffee, we all drink coffee. Starbucks 10 years ago, where'd you go get Starbucks, you walk in. You say to the barista, I want this latte. You wait in line, you'd wait for them to take your payment. And what you would do is this is 20 years ago, you would lose weight from the call your end. Now. You go back. And now Starbucks, come out comes out with this payment app. I thought it was the dumbest thing in the world. Like, I'm going to order coffee on my phone. I'm then going to drive to go get the coffee. And I'm going to wait in line or did John stole my coffee. Like, it didn't make sense. It came to our market. And I was blown away. I get to order coffee and it works at the time revolutionary like I don't have to stand in line like, now walk up and grab it. Yeah. And now you can't even imagine not even having that. It's like standard. Fast forward to today. Literally, I walk out of my house and my iPhone attached with Starbucks literally knows my location service and says, Would you like to order your cold brew? On seventh? And K? Yes or no? And all I say is yes. So think about it. We've gone from standing the line and ordering coffee to mobile ordering to just saying yes, digital revolution. We have revenue. That's true. Now let's even go to real estate. Well, we'll personalize and real estate. If you back in the day one to sell or list your home. What would you do you probably look on your refrigerator and look at the cabinets and see all the calendars and all the little magnets of all the realtors? And you maybe call one they'd have to come out to your house, they'd have to listen to talk to you and you have to stage it you have to do this. I'll tell you a price that you hoped that would be in by the way they're gonna tell you to give me 6%. Okay, fast forward to Okay, the Zillow is out there. For now, I can see what my house is worth. It was like revolutionary. Oh my gosh, I can see it my house is worth whether it's right or wrong, I can see what it's worth. And I know the Walk Score. I know the restaurant. I know all of this, this little black book that the realtors had 20 years ago. Now it's exposed today, several different eye buyers out there open door just named a couple that will literally buy your house with a click. We've gone from realtor coming to your house to me seeing what it is and being exposed to it to now I can get a cash offer within 72 hours. It's changed. Now if you look at our industry, I would say for realtors and technology and brokers. It hasn't changed to that. And you've got the Skyslope’s digital transaction management, you've got, he signs DocuSign Digi sign thoughts aside all those Okay, great. But what's really evolved since then, I've shadowed recently a lot of these teams because I go out and I this is how I stay fresh and I get in the trenches. And I'd like what's a product you can't live without what's a product you just you can't live without, like they're still using the same things that I was using. As a realtor. I pure based on muscle memory, I can jump in and do what they're doing. So what we did last year, and this year, we said hey, we're gonna change the game. Like, we're gonna recreate the entire process. And some of the stuff that we're thinking about is like, how do you have everything that's self-driving, like I tell my engineers all the time, like, we have hard jobs here. But there are engineers that are literally trying to not kill people in With technology with Tesla, like Tesla has not fit people in autopilot. Think about them. Like, your job is to do all this stuff, your data can be like, I have to have a car that's not going to hit people and keep people safe. Like, that's hard and scary. We just have to completely make the transaction autonomous. And there are no humans involved. It's like paper. And so what I see is like the true winners, you know, you can look at build versus buy, I think it's build versus die. I think this market is the best opportunity for technology companies in the real estate space where they need to TEDx on building they do they need a TEDx and building they have to face what is ahead of them for us. Why do I have Why do I even need transactions? Why don't even need to audit, I should automatically have the file, I have the form, I have the data, I have the signatures, I can read the data on the form, I can read the signatures on the form. Why do I even need an audit? I should tell an auditor I know what's wrong. And this is what it is and just confirm I'm accurate. And then eventually, I'm just going to do it for you. That's real. And we're working on that stuff. So when I think about it our world, what is it? It's how do you have a true autonomous transaction platform, right? Where it's all self-driving. Now, when I think of the real estate in a hole, man, there's like so much crazy stuff happening. If you think about it, the markets change. I think realtors have way more leverage now over brokers than they've ever had, I think for brokers and we sell the broker so I'm so, everyone's listen, I'm a broker, agent, team, transaction coordinator, Assistant fan across the board. I'm a lover of all, but brokers are a serious problem, because they have to shift it really changed their value prop, what's the value property bring to the table because it can't be, hey, this brand is the best brand, the end of the day, the agents get the business who they are. So and you know, it's oh, we're gonna, you know, help you and train you. And I can go on YouTube and learn all this stuff now. So the value prop for brokers, they have to fix that change that. Yeah, seen as agents now have the highest splits possible. A lot of disrupting models out there. So guess what agents have leverage now. Teams have leveraged now. And agents are almost like many brokerages, many teams themselves. So I think what you have to think about is where's the industry going? I think you have to also play in a lot of this digital space of what's happening. And I think you have to also get rid of a lot of the noise because there's a lot of noise out there a lot of products, a lot of technology at the end of the day, they have to work. And I think the real agents and brokers that are win are the ones that utilize technology but also still put the work in right now we depend only an only on leads, I think leads are great. I think how do you take that lead that you get and incubated in a way where you have a customer for life? I think that's tough because we don't want to work out legs. When we go to the gym, I want the arms and chest it's the easiest stuff to do, right. But legs is the hard muscle to work, I have to work that muscle. And I think that's really and you know, use that analogy. You work legs, that's where you burn the most fat three hold the most fat, like the three store the most fat. So I want to work that muscle if I'm a realtor broker because I think that's the muscle in the future that's going to matter the most. Like we eat the meat, we eat what's in front of us, this leads ready to buy and we'll handle them and I get it but you have these other 10 leads that if you incubate them the right way, or referrals, it's a goldmine out there. And I think those are the people are going to win, I think real estate's in a really interesting place right now.
Brian Charlesworth 48:25
Yeah, that's those are some great insights. Tyler, thanks for sharing that. That's, you know, I usually dive into some personal questions at the end here, like where do you like to, you know, travel and that kind of stuff. But we are short on time. Is there anything you want to share before we, before we let you go today?
No, I mean, look, I think that real estate's the best business anyone can be in, we and I say we, because I'm a real tour myself, you know, like, I still have that mindset for myself is like, we paid a lot of money. And I think realtors have to start to think about how to provide value. If you talk to your clients, how happy are there, their services will all say, oh, no, they're happy, they're happy, you know how happy real happy are they because we are going to be the disrupter of our own business. I do believe that if we can't provide value if we can get on with the technology that's needed, we can't provide updates and be the best of the best I'm telling you, it just causes for disruption, and just causes for Why's a consumer feel they need to pay you 6% it's our job as realtors to articulate the value of why I get paid 6% And it's not because it's standard. It's not because of that because that's where disruption happens. So we have to get better as realtors to equip ourselves with the tools and the top tracks of why we're valuable. And we have to also deliver on that value and I think we are the biggest folks that are hurting ourselves in this industry. So I just might my message would be like double down on your value double down on why you think the House is that much and use data, not an opinion. You know, double down on making sure What you say you're going to do, you're going to do, and we're all gonna say like, oh, that's what I do Tyler, but I'm gonna tell you like, I see a lot of realtors out there aren't doing that. I'd say it's more the majority than the minority. And I'm for it. I'm one of them. I'm waving the realtor flag all day baby, right? Like, I'm drinking the Kool-Aid, making it myself. So that'd be my message to folks.
Okay, well, it's a great message. Obviously, you have a passion for the business for the industry, you've had a major impact on it. So congratulations on that. And thank you for you know, being willing to step out and take some time with me today. Tyler, it's been a lot of fun.
Tyler Smith 50:35
It's been fun going back through memory lane. Thank you.