The Very First Episode ft. Sharran Srivatsaa | Coffeez for Closers with Joe Shalaby

0:00We've had the privilege of sitting down with world class minds, 100 plus episodes, two full seasons, billions of dollars of wisdom, and it all started right here. Our very first guest, Shiran Srivatsa, entrepreneur, investor, and president of The Real Brokerage, where he helps scale to over 14 ,000 agents and over a billion dollars in revenue. He's sold companies, built others, and still wakes up at 5 a.m. daily to coach thousands. From Wall Street to real estate to angel investing, Shiran's story is what happens when consistency meets vision. If you're serious about building something that lasts, this episode is required listening.

0:45It's where the coffee's legacy began. Welcome back to the first ever coffee's episode with Shiran Srivatsa. Let's go. Quick break. If you're a loan officer closing 50 to 100 million dollars a year and still capped at 150 basis points, you're leaving serious money on the table. At eMortgage Capital, top producers are taking home up to 400 basis points with better tech, faster closing, and full control. No junk fees, no red tape, just real comp. Hit up joiningmortgagecapital.com and stop building someone else's empire.

1:25I'm so stoked that you're here and you got so many projects underway. So we're going to dive into it, but you had five exits. What's the exit that you're most proud of? So the first one is the one that I'm most proud of. It was a technology company. The craziest story of how this happened was I was a computer science math major at college. And when I was done, I was in a programming contest. I was a nerd. I was in a programming contest at UC Berkeley. And I finished presenting on stage. And one of the judges comes up to me after. And he's like, hey, kid, you're not going to win. I'm like, oh, man, thank you.

2:00He's like, but the project that you talked about, I actually funded two other guys. I think what you have created would be a great addition for them. And so he connected me with them. That was our first company. We raised tens of millions of dollars on Sand Hill Road. And then that got acquired by Sienna, which is publicly traded. So a chance meeting where I presented at a programming contest, that led to me joining a company and using the thing that I built as my senior paper to then actually build something that is live in the world today. That's amazing. What is that company? It was called Light Era and that was acquired by Sienna.

2:37Light Era, what did it do? We built optical switches, optical networking, big box. So we competed with the Ciscos and the Redbox of the world. So you were a programmer by trade. That's like your niche. Yeah. That's awesome. And so you're most proud of that because of just the chance that just introduced you to, you know, the entrepreneur spirit. Yeah. And understanding that, you know, being at the right place at the right time and just innovating at like lightning speed at the time. Well, I'll tell you that there's two deeper benefits from that. Benefit number one is I didn't know anything about building a business or raising money or how comp structures work.

3:15When the exit happened, I thought I was getting this much, but I actually got this much. And I was like, why did I get like a one full zero less? Why was that? Because there is a clause in my contract on a ratchet. And it's a dilution preference, which I had no idea about. and this was the olden days where you didn't even have online bank accounts it was 2001 on the exit and I remember going to a Bank of America ATM when the wire hit and I would click summary statement and I'm like it's not hit yet summary statement it's not hit yet summary statement it's not hit yet so I would do like seven eight times that day and then finally like that zero is off and that's what made me realize that I need to learn business in a whole different way how what contracts actually mean.

3:58So that taught me that the hard way. But at the same time, the judge in that place had invested in me and supported me is still my partner today. So 20 plus years later, he took me under his wing. He got me that introduction. And we've been partners in several companies from that day all the way to today. So I built a relationship with one person who has been an amazing mentor to me. You know, sometimes like those big losses, but the relationships that you build through those losses are priceless. Yeah. Yeah. You could, I could never go back and recreate that. What, what happened there taught me more about business than anything else, because a lot of people get early, good early exits along the way and they think it's like that all the time, but it's not.

4:40But learning it that way now allows me to realize when I invest in a founder, I'm like, Hey man, I know what a dilution is. I'm not going to screw them that way. Like how it happened to me. So it made me think a lot about how to be a better investor too. So do you invest now in your angel investor? Yeah, so we have an angel investing arm. We have made like 24, 25 investments over the last 10 plus years. Most of these companies need follow-on rounds. So as soon as you make one, we've realized that whatever we commit to one, we double our investment because we know that there's never, not one time been a company that we've written one check into that have actually said, oh yeah, we're done.

5:13That's never happened. So we always say, hey, we're gonna write one check and we're gonna double it because we know that's gonna be the follow-on round. So have any exited? Have you had any big exits out of any of those? Multiple. Several have had private exits, but one of the 25 went public, which was a good win for all of us. That took care of portfolio theory. That took care of everyone. So is it true when you have these kind of – one company basically pays for all your 20? It does. It would be great to have two, three. Correct, but it does. But the problem is I will tell you – so there's this legendary investor.

5:46His name is Fred Wilson in New York City. and he always asked, the first time I met with him as an angel, when I got my first set of cash, I was like, hey, I want to be an angel VC. He goes, okay, I'll meet with you. Met with me for 15 minutes. He's legendary. And I asked him, so what's the secret? He goes, when you know that after you've deployed all your cash and you still want to keep going, that's when you're a true investor. And I was like, what in the world are you talking about? He goes, you're going to make 15, 20 investments thinking you're a hotshot. And after none of them are going to pan out, Maybe one will.

6:17And then will you stop or will you keep going? That's what makes a good investment. So the first 10 years, I was just writing checks like I had no idea. I was trying the best that I could. But now I'm a significantly better investor because I kept going. And you learn stuff the hard way. It takes a while. The longevity of the investor game is more important than picking winners. It's super hard to pick winners. You know, that sounds like the essence of the entrepreneur spirit, right? The essence of the entrepreneur spirit is just to push beyond. And what I've even realized, even with this company in like 2022, 2023, some of the tough times we had over with the rate spikes is like, I'm willing to go all in and be broke and do this with, and I don't care if I make money.

7:04Yeah. Well, let's see, that's a really interesting thing, right? Real estate agents, mortgage brokers, why do they get into the game? They get in the game for two big reasons. One, they have full control over their time. So you have time flexibility. And two, they have unlimited income potential. Well, when you get extreme time flexibility and extreme income potential, what you get for half the population is laziness. That's the problem, right? When you have unlimited uncapped potential, something dramatically changes. So what do you actually need for it to happen? The need is not, the need is playing the infinite game.

7:35The game is not to win. The game is to keep staying in the game. And when people realize that, like great entrepreneurs, like you realize that. I think the way we do it well, the way you do it well, is like you freeze lifestyle. You're like, hey, I'll take less capital. I'll take less cash flow. But I'm not going and buying four Maseratis. But I'm going to freeze income, right? No, it's a winning mentality. I don't care what it is. I just want to win. Yeah. And the drive that you have when you're an entrepreneur, and you're like, to your point, and when you have extra time, I mean, laziness is like so immense between our two organizations.

8:09It's like everybody, you know, the average loan officer, the average realtor is just immensely lazy or they just know how to be leisurely would be a good way to describe it. I agree with that. I actually have a deeper feeling around that. So if you're a real estate agent or a mortgage loan officer, listen up on this one, right? It's not that you're lazy. It's actually the deepest spirit of entrepreneurship. It's the fact that you don't know what to do next. That is the problem. And most people, coaches, consultants in our space, are very, I'm gonna push coaching so that you sign up for a$1 ,000 a month package with me.

8:44Instead of some, if they sat down with you for 15 minutes and you said, hey, here's your plan, and they just did those things, they would win hand over fist. Most of the time, they just don't know what to do. Like I would tell, like yesterday, I wrote an email to our entire company, and I said, send this email to everyone in your database. I was like, don't change anything. You know what they will do? They will change it. And I said, if you change stuff, you will change the result. Copy, paste, and send this exact same thing. And whoever copy pasted and sent it and is sending me screenshots, man, I got like eight responses, nine responses, 14 responses.

9:12And I'm like, yeah, you got to find a way to not put your pink font and actually like do the things that work. And so when someone gives you like a playbook that works, have the courage to do it as opposed to saying, oh, I want to do it my way. Sharon, you sound like me. Like I literally, with my loan officers, I'd be like, here's exactly the data. Here's exactly the message. Here's exactly the cadence of messaging to go out, copy this, implement this. It's bulletproof. How did you mess this up? I don't understand. Let's do tactical stuff. I'll give you two really interesting examples. There's two emails that work, emails or texts, that work for a loan officer and for a real estate agent.

9:51The number one email that can work for a real estate agent is this. The email is, are you still interested in buying a home in blank? Are you still interested in buying a home in Orange County? Question mark, send. That is the number one performing email you can send. Not like, hi, Joe, remember I met you on 123 Banana Street? None of that. Are you still interested in buying a home in Orange County? Question mark, send. That is the number one response on the email that you get right now for a real estate agent. Number one. The second, and I would send that once a quarter. The second for a loan officer, the number one response for a loan officer and even for our agents is, hey, would you like me to let you know when the rates drop below 5.5%, 6.5%, whatever the number is.

10:23That's all you're asking because now the person that responds to that activates and says, oh yeah, I am interested in that because now you have a conditional buyer, right? If I have real estate agents sending out the LO email, I have real estate agents that are saying, hey, Mr. and Mrs. Klein, would you like me to let you know when rates drop below 7 %? That is generating more leads for an agent because now they know that they're conditionally responsive to the, they're buying a mortgage payment, right? So I always tell people, consumers don't buy homes, they buy monthly payments. So our job is to at least know where that condition lies and every piece of communication should be tied to that.

10:57And then you get a significantly more bang for your buck from the leads. You have great lead strategy. I mean, we have a lot, even in the mortgage space to learn from you. I mean, where did you, coming from the tech space, understand the psychology of sales? How did you even get introduced to that? Because that wasn't your forte. No, not at all. So I learned, I got a million dollar sales education because after, so I went to business school and then I went, I was a banker at Goldman Sachs. And so I was on the Goldman floor. So I did, we were, there were 33 MBAs that got in my year that year, it was 2008, middle of the financial crisis, 33 MBAs that got to Goldman.

11:33I had 39 one-on-one interviews to get the job at Goldman, 39 individual one-on-one interviews. But at Goldman, our first six months were in New York and it was straight training. I'll tell you what happened. My first day on the job, they hand you a BlackBerry those days, a no limit am amex corporate card and a headset and i was like what is the headset for so the managing partner tells me put the headset on don't plug it into anything i want you to get used to that as a part of your body like think about the craziness associated with that it's still part of my body when i used to come home after goldman my wife be like hey you had you had a long day and there was the there was the line on on my hair with the headset with the band but that's important because they wrap around your head now so you don't get that line but i still have I still have the same exact headset, which goes over my head.

12:23But the crazy part is you learn skills, right? Everything is a skill. And I remember the time where we were calling on CEOs and CFOs of big companies. And two months into training, managing partner walks in. He says, all right, who was birthday in January? Like six people stand up. He goes, come on up. One person comes up. They stand in front of the class. They hit a button, the CR, like Goldman's CRM pops up. It has, you know, CEO of eMortgage Capital, Joe Shelby right there, right? With phone number, et cetera. He's like, call. I'm like, what the heck? So you're calling in front of the class.

13:01Like think about the pressure associated with that. Wow. Right? And Goldman is some serious bootcamp. You have the managing partner sitting right there saying, call. Right? And all I said was, so when my turn came up, I was like, hey, I will make as many calls as you want. not only the people in here, but in a phone book, whatever. I'll make all the calls. Can someone give me a script? Like, what do I say? And then the managing partner starts laughing. He goes, the first person to actually ask for a script. And I was like, I'm not making it up. Like someone has gone before me and done it right.

13:33And I think the skills are important. There's no reason for us to figure it all out. It's all the sales training I learned. Most of the foundational stuff happened at Goldman. Like the skills, the scripting, the tonality, actually practicing framing, and leading people through the process, doing a consultative selling, all of it happened at Goldman. Wow. Yeah. And it's really like they don't have like a routine. Like we actually have sales coaching here. I got a guy who comes in and trains them with like NLP sales strategy. They didn't have any of that at Goldman. No, it was close enough though.

14:07It was very functional where they would teach you how to approach a client. They would teach you how to use soft language. They would teach you how to frame each conversation. they would say, hey, you don't say we're the cheapest solution. You say you're the most efficient solution. Like small things like that are tremendously helpful, right? The greatest phrase that I learned from the CEO of Goldman Sachs at that time, his name was Lloyd Blankfein. He said, the limits of your language are the limits of your world. And so everything is very language-based. And he goes, if you can't spend the five minutes practicing the language, how do you expect the client to trust you?

14:37And so it's super powerful. So I'll give you the craziest real estate story. When I got in the real estate business, I knew nothing about real estate. I was I made investments. I owned my home. That's all I had. And I hired a coach and the coach said to me, he goes, Hey, if I were you, I would do something that no other owner of a company has done. So I memorized the listing and buyer agreements word for word. And so now when I'm in a listing appointment with a client, I'd be like, Hey, section nine, a of arbitration talks about this. And I would recite it completely memorized. Right. And so the client would be like, how do you know this.

15:12I was like, how should I, I need to know this to protect you. And that's what generated so much, so much knowledge because, and I'll tell you how I did it. I took the document, I read it, I recorded my computer, I put it in an MP3 player during those days. And I just played it on my drive up and down the four or five, just memorize the entire contract. You're a brilliant student. You know, you just, you just, it comes in your DNA, just being Indian. You were supposed to be a doctor.

15:38i know because i'm egyptian so it's the same thing we went through the same thing i did that in law school i had to do the same thing you did uh but but from a when you know you can get a skill i think a lot of a lot of salespeople both real estate agents and mlos think that hey i'm an outgoing person i'm a i have a i have a high d personality i can sell that's not it when you have skill then you can sell yeah and that's the cool part so skill is super important you know there's there's a couple things there's skill there's grit you know and you have to have both and you have to have ingenuity people are like well someone was talking to me the other day and they're like well why are you successful like i work really really hard too like i just don't as an entrepreneur like well working hard is not not the only solution like working hard is a big part of it, but how, how much are you willing to sacrifice, you know, and are you willing to outwork everybody?

16:33Yeah. And like, can you outthink them? Are you, can you outsmart them? Yeah. There's, you know, there's a, the, a lot of times I look back and I'm thinking about like, is there a formula for success? Right. And I think there's three big pieces and the nice part, folks that are connected to your organization, you support them significantly. I'll tell you what those pieces are. So if you take a triangle and you think about three sides to it, there's opportunity. number one so if there's not a lot of if you're super skilled and you don't have anybody to like talk to that's really hard so opportunity call it leads call it people that you're talking to the second is effort and the third is skill so even if you provide training so you're providing skill to people you're providing opportunity people they still have to do the work so but the nice part is great companies like yours provide opportunity and skill and all that the sales professional has to bring to the table is the training, is the effort.

17:25And so I always ask, is this an opportunity problem? Is this an effort problem? Or is this a skill problem? It's very quick diagnosis. And if you can be really honest with yourself, you'll figure out what the problem is. You know, we try to present the opportunity. We try to mitigate the skill needed, try to mitigate the effort needed. But at the end of the day, you know, even through all those strategies, like we you know we still need significant effort yeah we still need you bought in yeah of course um i want to talk because i i don't i want to and people want to know like so you sold telus real estate you had that exit how first off how did that happen and then we all want to know about real yeah of course so um the the coolest story how this happened was i was a banker in new york and my partner, who has been my mentor, said to me, he's like, hey, there's this small company in Beverly Hills.

18:18It has one office and a few agents. Do you want to invest in it? I was like, I don't know anything about running a real estate company in Beverly Hills. I live in New York City. But if you're in it, I'm in it because I'm partners with you. So I was a passive investor in Telus when it started. And then one day I got quarterly statements. I was like, huh, this doesn't look, this looks strange. And so I found the P &L and I was like, it looks this doesn't look right and so i talked to the cpa and he's like uh we found that the then ceo was embezzling wow and so i was like all right well now it's my fiduciary responsibility to not allow this to happen so me and my partner uh met with the ceo and bought him out and i this and i took a six week leave of absence from banking to do this and i said well my job is over the next six weeks to stabilize the organization to find a ceo so i can go back to banking well you're gonna to laugh when I tell you the story.

19:10I had a simple model and my model was, all right, we're doing roughly 300-ish million in gross sales volume. And I accidentally put a zero. So it became 3 billion. And suddenly I was like, what just happened to the P &L? And the model just changed. So I was like, wait a minute. The vision. It was by accident. So then I told the board, I was like, hey, I will resign from banking. I will come run this business, but we're going to do 10x in five years they're like how and they're like well we don't have any money to pay you i'm like i don't need money i bought my equity because we bought this other guy out i will build and grow this business so we went from one office 33 agents to 22 offices 700 agents uh in five years and um and then sold the business to douglas ellman which is publicly traded out in new york and ellman wanted a california-based footprint now here's the key behind how we did that as an investment banker, I didn't know what our business was ever worth.

20:07So every summer, I would shop the business softly. So I would go to the three, four big suitors, and I'd say, hey, here's our stuff. And they'll say, hey, we'll pay you. I'm making up numbers. Hey, we'll pay you$50 million for this. And I said, thank you. So now I know their model. I said, well, what if I wanted 100? They said, well, if you want 100, it needs to have A, B, C, D, E. I'm like, great, thank you. So I took the A, B, C, D, E, handed it to my COO. That became the business plan for next year. I did the same thing next summer. I said, oh, it's worth a hundred now. Good job, Sharon. Hey, what if I want 150?

20:37Well, if you do A, B, C, D, E, it'll be 150. I'm like, thank you so much. I took that, handed it my sale. That was a business plan for next year. We did that for three years in a row. I need to go over my business plan with you here. But the interesting part is what founders do is they think that that becomes the plan, right? But they don't realize it from a mark to market from who the potential buyer would be. That's way more exciting because now I can go back to them and say, for three years in a row, you told me I built. You told me I built. You told me I built. And I'm working off of their model.

21:08So having these conversations became really easy because they knew that whatever they say I was going to do, I was going to do. And then the offer from Doug Selman came, which made it really easy. But shopping the business every year made us have a much tighter business. That's just truly insightful. Like I never even thought to shop my business. I don't ever want to sell it, but it would be good to know, like, you know, how many billions would it be worth if I did X? No, totally, right? But I think that's important because it forced all of us. It forces us to know where we stand because we are on someone else's scale.

21:46Diagnostic first, right? Diagnostic is really important because when we walk into a doctor, they just don't start diagnosing us. They're like, hey, does this hurt? Does that hurt? Does this work? Does that work? that's very prevalent across every business. That's why even when I'm talking to a real estate agent or an MLO, I'm like, hey, is this an opportunity problem? Is this an effort problem or a skill problem? I can dice it out very quickly. If it's an effort problem, like, hey, what kind of business hours do you keep? That's the standard question. Like, what do you mean? I'm like, okay, so you don't keep any business hours.

22:11That's the problem. Because you just wake up and if you have work today, great. If you don't have work today, great. And that's the problem for a lot of people. If you can find a way to diagnose this stuff quickly, then success is like just around the corner. i mean like your like your salesmanship your your uh vision in sales is like it really is just another level um so i want to dive into how you've been able to do it with real like you've been able to take telus you sold it dallas elman great i'm sure it was a good exit but what it did was it positioned you to start to be the president of real so are you the president of ceo president of real president of real is there a ceo yeah there's a founder there's a founder yeah who's amazing he and i have uh awesome partnership awesome so um and you're i'm sure a pretty decent equity hold shareholder in real um so how were you appointed as the as the president of real and then also like and then i'm going to talk about some of the vision because you got some immense vision for 2024 yeah for real so how it all happened was after we made our sale to dougas element i had a five-year non-compete and so i sat on my hands for five years so i did two things during that time.

23:18Thing number one was, since I could not work in the real estate business in the US, I helped real estate businesses in Australia and New Zealand. And so I got a chance to do that for a few years. You have a non-compete here in Forcible in California? It was across our, wherever the TELUS footprint was. So it was, and I wanted to respect that. I mean, they paid me to sit on the sidelines. So I was very happy to do that. And then while my non-compete was coming to an end, I got a chance to, I've been consulting with several big real estate teams in the US. And many of them were interested in going, leaving brokerages, switching brokerages.

23:49And I said, hey, if you want to go somewhere, I want to make sure I get connected with who the top players are. So I reached out to Real and said, hey, I've got several teams that want to move to Real that I advise. Let's have a conversation. So that's how I got to know the Real platform. And then that's how I met the founder of Real. And he was like, hey, what would it take for you to potentially come out of retirement to do something like this? And I said, well, I want to run the business. I don't want to talk to Wall Street. I've done my wall street thing my i just want to build and grow the listed business and he says well i'll take care of that and you take care of this i was like that's a great partnership so we get a chance to really work together i grow the business and so everything that is quote real broker is mine and but i don't do a lot of your founder does all the ops you do all the sales all the visionary stuff he's amazing he does he he he does all of the uh the wall the public rotated wall street functions which is a lot by the way yeah which is a lot like i would not want to like hey i'm I'm like, where are you today?

24:44He's like in Milwaukee at an analyst contest. I'm like, oh my God, how do you do this stuff? And the reporting requirements, the working with the board, the audit committee, it's a, the cost of being public is a lot, but it also gives you a lot of benefits, which is powerful. But the running of all our operations, essentially it is growth, our COO function, our CMO function, all our brokerage functions, they're all mine. Wow. So what's, so we're coming short on time. So I want to make sure that we go through your vision for 2024. Yeah. And what do you think, you know, for people who are buying REAX right now?

25:22It's tough. So a lot of this is material and non-public information. No, no, I'm just kidding. But really tell us about the vision for 2024, just so people have some understanding about what some of the growth strategy and goals are for 2024. Yeah. So there's a few big initiatives in 2024. Well, in the last, Reel was essentially built in three years. In the last three years, we've gone from roughly 600 agents to 14 ,000 agents. So one of the fastest growth. We're in all 50 states and the biggest Canadian provinces. And Canada as well. We're in Canada as well. Which is a great footprint in North America for us.