Kylie Davis: (00:01)
Welcome to the Prop Tech Podcast. It's Kylie Davis here, and I'm delighted to be your host as we explore the brave new world where technology and real estate collide. I passionately believe that we need to create and grow a sense of community between the innovators and the real estate agents, and sharing our stories is a great way to do that. The aim of each episode is to introduce listeners to a Prop Tech innovator who is pushing the boundaries of what's possible, and explore the issues and challenges raised by the tech and how they can create amazing property experiences.
Kylie Davis: (00:32)
My guest in this episode is a great storyteller. It's Peter Schravema from BoxBrownie. BoxBrownie is one of Australia's best success stories in the residential prop tech space. They are an automated platform that makes it ridiculously easy for real estate agents to get great property shots touched up; whether that's about removing shadows, whether it's fixing the lighting, whether it's turning overcast, rainy days into sunny days, or even adding virtual furniture renovations. They won a coveted spot on the NAR REACH programme 2019, and they have completely dominated the conference circuit in the U.S, and even now into Europe, using it to successfully launch the business globally. So Pete has actually just got off a plane in the last day and is back home after an extremely hectic year. So Peter Schravema, welcome to the Prop Tech Podcast.
Peter Schravema: (01:21)
Thanks for having me. I'm a avid listener and I'm delighted to be a part of it.
Kylie Davis: (01:25)
Thanks so much. So Pete, we always ask our guests what their elevator pitch is, so what's the-
Peter Schravema: (01:33)
Yeah, we edit photos and [crosstalk 00:01:36] it is the elevator pitch. We edit images and you know, sometimes when a can't be bothered saying the elevator pitch to somebody after a long conference, I just tell them that we're the bastards that changed the grass to green and the sky to blue. And you know, we do that in a short amount of time for not much money and then they instantly think that we somehow modify it so it's more beautiful than what it is. I think the biggest stand for what we do is to take an image and return it to what the eye sees as a really basic platform. But then you know we have all of these other edits that come along like twilight conversion and virtual staging where we put furniture in and renovation. So we're an image editing companies is the basis.
Kylie Davis: (02:22)
Yeah. Fantastic. So how did the company start? Because you guys have been around for a little while.
Peter Schravema: (02:27)
Yeah. So about five years ago, Brad Fillipone, who is the owner founder and was in photography, he's quite a talented photographer on the sunshine coast, still is in his own right. He's hung up the camera now. But he came up with the idea that a lot of the edits that he was performing as a photographer probably should and could be available to real estate agents. Now initially, it didn't start out as real estate agents, I suppose. Boxbrownie.com in its earliest format was an app and it was actually aimed at vanity edits, which is boob jobs, tummy tucks and thigh gaps, that kind of thing. so-
Kylie Davis: (03:02)
I'll send you my shot. I could do with a boob job.
Peter Schravema: (03:06)
Who needs to improve perfection, right Kylie? But that was how it started and I suppose Mel, who's the other really, really important piece of BoxBrownie is our CTO and also owner. He really developed the engine that is behind BoxBrownie, which is in a very, very simple simplistic format I suppose, introducing a client to a graphic designer for an agreed product in a short amount of time for a great price. So that is the tech that was developed. I came on about three and a half years ago and my background is in property of any kind, property sales, property leasing, commercial real estate, and a lot of the products that you currently see displayed are as a result of things that we've worked on collectively is all three of us and really started to forge into that property market.
Kylie Davis: (04:04)
Fantastic. And so look, Mel's got an interesting background, doesn't he? He's a bit of a math genius, isn't it?
Peter Schravema: (04:10)
Kylie Davis: (04:11)
Wasn't he a child genius?
Peter Schravema: (04:13)
Yeah, so he was accepted into university at the age of 12 to do a bachelor's degree in mathematics and statistics. And not many of us have that claim to fame. Certainly not myself.
Kylie Davis: (04:25)
Peter Schravema: (04:26)
He can split a bill in seconds, not minutes, in his head. So you know, quite impressive and the tech prowess he brings to it. Even just this morning I was meeting with Mel about a bunch of the innovation that we have coming out that's still under wraps and it's incredibly exciting. He's definitely on the cutting edge of looking at where we go next.
Kylie Davis: (04:47)
Fantastic. And so how did you come to get involved in BoxBrownie?
Peter Schravema: (04:51)
I was the former operations manager for three franchises. So one of them was called Investor Property where we sold investment property. The other was called Queensland Property Rentals, which was longer term rentals, like a property management business. And the third one was one we set up called Direct Hotels, whereby it would be short term leasing. And so collectively, the way we would work is we'd sell a property and we'd either rent it out at a long or short term and collect the management rights and therefore, underpin what we told the investors that we would get as a return. So my job was in all areas of that sort of that that fell into the operations role. Ironically, I resigned that job because I wasn't spending enough time at home. [inaudible 00:05:35] that, you know, I've gone from spending 30 days on the road to 300.
Peter Schravema: (05:44)
And that's just the nature of the business that is currently here. You know, I resigned that job. They advertised for a personal assistant. I submitted my full resume with all of my licences and I even told them I could type at 200 words a minute. And they got me involved in that was sort of the history behind BoxBrownie, I suppose.
Kylie Davis: (06:06)
So you started as an admin assistant in the prop tech. That's your claim to fame.
Peter Schravema: (06:11)
Look, they know they never actually called me a PA, but no, the nature of this growing startup and even today is that we don't really have titles. America, where we operate quite a lot, they do. They have a lot of titles and they love to hear, you know, I'm the senior VP in charge of whatever. We're not really that way inclined. In fact, if I had a title on my card, it would probably be janitor because it's sort of anything from there in between. And that's the same for Brad and certainly the same for Mel. We're so small, even though we've grown, that we still fulfil different roles and we really try to hire people who sort of echo that sentiment.
Kylie Davis: (06:58)
So how big are you at the moment?
Peter Schravema: (07:00)
As far as employees?
Kylie Davis: (07:04)
Well, give us anything that will help us understand how you've grown in the last five years.
Peter Schravema: (07:08)
Yeah. So when I started, there was one employee, he was, it was effectively me. And then I hired a second one called Tash and it sort of went all, she's still with us by the way, and went all the way up to, we've got about 20 in head office here right behind me, at the moment. We have now 70, I think it is that last count, customer service staff located between Philippines and Mexico who answer phones and respond to emails and live chat, if you've ever been on the site. And we have between one and one and a half thousand editors who are subcontractors. Obviously we don't we don't pay them a weekly wage. It's a payment per job kind of thing. So they can work as long or as hard as they can. And the reason we don't know that exact number is that some of our contractors will have multiple people sort of under them. So we estimate somewhere between one, definitely over a thousand, but somewhere between one and a half thousand editors, which probably now now makes us one of the biggest graphic design workforces in the world.
Peter Schravema: (08:10)
It's certainly something that has happened recently is you, you know, when I say we edit images, I'm serious about that. We have now sort of rocketed to become a threat for companies like Fiverr and Freelancer because they operate slightly different. But they used to be the incumbents at having a large workforce. Certainly, now we have serious climb to that. And I don't know who sits where, but that's where we currently are.
Kylie Davis: (08:39)
So you guys are the Uber of photo editing.
Peter Schravema: (08:43)
Yeah, to an extent. It's very similar. We don't like using that because every-
Kylie Davis: (08:46)
Because everyone hates Uber now.
Peter Schravema: (08:46)
Well it's not even just that. Every time I hear a startup they come and say we're the new Uber, and I never heard Uber saying we have a new Uber. So yeah, I don't know. That's a humbling title to sort of have thrown at BoxBrownie. But yeah we're certainly solving the problem in more than just a property vertical. We're also in automotive and commercial real estate. We're an online retail and fashion, as well.
Kylie Davis: (09:13)
Cool. So look, that raises a a great point. I guess we're seeing that real estate and even photography is moving into this whole AI area and automatic edits and the ability of cameras and our phones even to capture and adjust and edit images is extraordinary when you compare it to what we could do five and especially 10 years ago. But you guys are still using humans for the photo editing. So what's the thinking behind that and how long do you see that continuing?
Peter Schravema: (09:44)
Yeah, good question. Look, I think as far as AI is concerned, it's always going to improve. That's just a given. We always see that increasing and there will be a stage where a lot of the products that we do no longer look the same as what they did when we started. We've already seen changes, I suppose, in that area. The rise of virtual renovation is one such area. It could be that our Aussie $2 image enhancement, where we take probably more a rental photo and digitally enhance that, hasn't quite gotten to the stage yet where AI can take over that. We've seen a few players where it's close. And so you know, I suppose in answer to your question, there are products of ours that the will be threatened by AI. I think our entire product range eventually will be. It's not at the moment.
Peter Schravema: (10:36)
Certainly none of the tech has got to a stage, specifically to a stage where they can edit the dual light sources. That seems to be the issue in any of our edits, whether it's staging or twilight conversion or image enhancement. But yeah, you're dead right. We're well aware and very honest about the fact that AI's definitely coming, the image quality is getting much better. Photo capture is getting much better on smaller devices. [inaudible 00:11:04] are getting better. But yeah, what AI can do in the future will be nothing short of amazing. Right now, it's not at the standard of what we can deliver.
Kylie Davis: (11:16)
I tell you what, I want to have a play with the robot with the bot that Mel invents because that will be an interesting bot when he gets his brain around that.
Peter Schravema: (11:26)
And that was just the meeting I came out of this morning. It's fascinating to see what Mel is actually doing as far as AI is concerned in imaging. And whilst it's too early to sort of even discuss it at the moment, a lot of the potential that we see coming in as early as six months away from now, will be mind-blowingly good. And it's pretty exciting to be on the cusp of that.
Kylie Davis: (11:50)
Fantastic. So look, you guys have had phenomenally huge year or even 18 months, I reckon, ever since you got accepted into the NAR Reach programme. Tell us about what applying for that was like and how difficult or easy it was to get in. What's the story behind Aussies in NAR?
Peter Schravema: (12:10)
Yeah, look I think as the NAR Reach boys would probably like me to tell you that it's really hard to get in. It can be. I think a lot of companies have found that it is actually quite difficult. It was somewhat easier for us. I think a lack of competitors made it a no subscription model. The cost of what we actually had, the fact that it solves so many problems and the commercial viability of what we already had before the NAR Reach programme even looked at us, made us a bit of a no-brainer and sort of a fairly simple entrance. There would have been a couple of questions about, scalability was one that we got quite a lot. How can you scale it when you're using manual edits?
Peter Schravema: (13:04)
You know that's a question that we answered very early on and we really haven't had an issue with that since then. So yeah, I suppose it depends on the product. Some of the NAR Reach applicants for next year that we've been helping through that process just in an advisory sort of role, just giving them information on either how the American market works or how to describe the problem that they solve in a completely different real estate system. That's been a more difficult approach for some of them. But Aussie tech is doing very, very, very well. We are superbly proud of how Aussie tech, you know, you are over representing one such company, Inman. We've been unbelievably proud of how Australian tech, the work ethic Australian tech has, it's ability to see really simplistic issues and provide some kind of solution to those issues in a way that makes sense in a format that's compatible with the market.
Peter Schravema: (14:10)
So yeah, we've seen quite a few come up and there's more coming. We're we really proudly fiercely Australian, fiercely Queensland. Sorry about that for the rest of you. But we fly the flag and we're really happy to see other Aussie property tech actually apply to the largest incubator in the world and have success there. So we're looking forward to that. I write my agent currently in there now, you may be well aware.
Kylie Davis: (14:39)
Shout out to Mark and the boys.
Peter Schravema: (14:41)
Yeah. Well I just came from NAR in San Fran and seeing those guys there and they're kicking ass over in the US. They're doing really well.
Kylie Davis: (14:49)
So, what I want to get a clearer understanding is what's the timeline look like for applying for NAR, getting into NAR, and then the following year when you're part of NAR? What's the commitment and the timeline around that?
Peter Schravema: (15:03)
Yeah, look, well the application process, depending on the product that you have can go anywhere from six months through to two weeks. That's really more a question of how fast can the NAR Reach programme work? What do they currently have? So if you were asking me this question and you'd made an application just before they were about to hit NAR San Francisco, knowing that next year is coming up and they're about to announce the 2019 people, you're probably not going to get into that programme. If you were to start on a timeline, a good six months out and give them plenty of time to have a look in a dialogue to answer any of the questions that they had and you put a successful application in front of them, completely transparently describing the problem you solve, the numbers game more, more than that, where you're actually heading, who will use you.
Peter Schravema: (15:57)
If you put that succinctly, and I know your data driven, but you put that in a data package and easily explain it to NAR Reach, it's just a case of whether their programme is full or not. And it might be a case that completely communicable, they will tell you you're not right for this year but come back and hit us up next year. So you know, it also depends on what you're after. You may be funded, you may not be funded at all. You may be commercial, you may not have a single client, but a great idea. All of those factors come into the play. They will dictate how long you are in that application process. As for the Reach programme itself, you need to spend time doing it.
Kylie Davis: (16:44)
There's a lot of work in it.
Peter Schravema: (16:45)
Yeah, there is. And a lot of it is hard work on the road. You need to consider how you're actually going to appeal to a American or North American clientele. For us that that was days of sitting down, figuring out our pitch to residential agents, to commercial agents, to luxury agents, to property managers. Then on from that to franchises, let's say a Remax walks up, what do we say to them when they get here? How do we know that we're going to solve a problem from them? And then beyond that to the various MLS's, which is like the RERQ's over there, and the associations, which are massive juggernauts. What is the conversation that you're going to have? And a lot of those, you'll get as part of the Reach programme, but if you're smart, you're savvy, you actually go over there and understand them first and do the research is integral to how we actually operate.
Peter Schravema: (17:36)
It was actually understanding the full process, understanding whether there were any roadblocks. We had questions thrown us about ethical marketing in the US and we had to really deal with that and to the extent that last year we've evolved into experts in ethical marketing, photography and copyright. We've taken elements of what we've done and we've gone into that space. But what you get out of the Reach programme will be largely influenced by what you put in. And that sounds like anything. You want to learn to be an excellent football player, a soccer player, you're going to practise. And the Reach programme is like a class. I hate to say it. A lot of the tech companies just don't get it. They get in there and they go, "Right, we're going to blow up anyway. We're in the largest incubator in the world for property tech. We're going to blow up."
Peter Schravema: (18:23)
And they don't, and they sit there and they wonder what went wrong. And the reality is, they are the people who don't turn up to booth next to me and NAR annual, NAR San Fran, they're the people who can't succinctly describe the problem that their tech solves. Sometimes, it's just that they've got the wrong team members, they've got a tech genius who's just not a salesperson or they've got a sales person who's just not a tech guy or you know, there's a combination of elements that are there. And whilst the Reach programme will try and push you through, like any class, that class may not suit a particular member. So it's not an instant guaranteed formula for success. There's still a hell of a lot of hard work that has to go on to make that happen.
Kylie Davis: (19:07)
Let's just pause there for a moment and hear a quick word from our sponsors.
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Kylie Davis: (20:04)
So NAR Reach have now launched their Asia pack in Australian, I guess intake and and they've got their new intake coming out of this region. They are, I just wanted to let everybody in the audience know that the guys, Isaac and Shelly, are fantastic for giving you feedback on your application, even if you didn't get in. So they'll walk you through and give you some really great insights into what you need to do. And when Dave Garland was over, he was saying that most of the applicants with NAR usually take three to four applications before they will get accepted. So if you really accept that feedback and work on it, you said as part of your business planning, that can help enormously. So Pete, when you, as part of the NAR section, how many NAR conferences are there that you've attended? And then how many were other ones that you've taken part in as part of your 300 days away from Ebs and the family?
Peter Schravema: (21:03)
Yeah, well fascinatingly in 2018, I was not spearheading the NAR campaign, but there are defined dates as to, the reach have their own meet up in Chicago. That happens about March from my memory, which really kicks the year off. They have the availability to plug you into something called the NAR tech edge, which are smaller conferences where you can go on the road and feature your product to regional areas. Normally attached to an MLS or association, and from memory, there are about 10 of them that you can do, but we didn't do any of them. We did none of them. Yeah, well it was largely the programming. From memory, the NAR tech edge always was over the top of another conference that had a lot more potential, which is what we thought at the time.
Peter Schravema: (21:58)
NAR mid year is well worth going to. It's a legislative meeting out of Washington, where they get to discuss a lot of the legislation, a lot of the regulatory possibilities or problems that they're trying to solve. It is also a conference where they discuss membership and dues, whether they go to raise them or lower them. Lots of committee meetings. And that is where this year we presented a lot of the challenges that they're experiencing as far as ethical marketing and photography. They have their massive event, which changes its location each year. It's just been in San Fran two weeks ago. So that's generally mid November, that will happen. That's a tough one to miss because you know, there's 25 odd to 35 odd thousand attendees. So it's not just a great thing as far as NAR Reach has consented.
Peter Schravema: (22:50)
So it's also a really good soundboard to see how the market's moving or how they accept your product. So they're the main ones. Then there will be smaller available market opportunities, which may be different for each member, where Miami have a conference called rock the market where they will pick the Reach programme members that they want to be part of that programme and give them an open invite and that is well worth attending. Miami's a massive association of realtors. California is the same. So there were those that are optional. In 2018 when we were part of the reach programme, a large portion of what we did was, I suppose, under the guidance of guy called Bob Goldberg, who is the head of NAR. And he said to us, "What I'd really like is feedback on how all of the various associations underneath the National Association of Realtors or members of, go to the far flung places. And as part of that, we would have done maybe 50 Association of Realtors, ranging from as small as Wyoming Association of Realtors through the big ones like California association or the Houston Association of Realtors. They're just massive.
Peter Schravema: (24:10)
The numbers games on those blow your mind. So that wasn't part of the NAR Reach programme. That was part of that guidance to us to sort of say, go out and test these. And we did. We sort of had varying degrees of success and at various ones really learned what we wanted. Even the format of how we attended them as a sponsor. And so our 2019 this year was incredibly more focused than 2018. All of the things that we learned about those conferences, we then decided, well we'll fine tune it for 2019. And we really think that this year, the conference schedule was way more focused. We got more signups, we got more clients to actually be a part of BoxBrownie as a result of actually attending focused meetings. We now have strict criteria, based on what we learned in 2018 as to how we approach a conference in 2019.
Kylie Davis: (25:08)
And so I know when I was at CoreLogic, their sponsorship calendar of events that you could go to and the money you could spend on those sponsorships was, just even in Australia, millions of dollars if you wanted it to be. Were you guys paying sponsorships to attend all of these conferences or with some of them part of the programme or how did that work?
Peter Schravema: (25:30)
No, no. In general, we were either paying or invited. I suppose in 2019, we've been invited to a lot more as our market saturation is higher. But in 2018, most of them were paid, I'd say roughly about 90%. Nine out of every 10 of them would have been paid, with some of them actually either paying or allowing us free from a presentation perspective.
Kylie Davis: (25:55)
So sorry, just so I'm clear, you were paying to go along to them and paying a sponsorship or they were paying you?
Peter Schravema: (26:00)
It was a combination, but nine out of every 10, we would be paying for. One out of every 10, they would either allow us to come along to be there or to actually they would pay us as guest speakers.
Kylie Davis: (26:16)
Okay, cool. And so you did really successfully use that whole content marketing idea around, based out of your product. Tell us a little bit more about that, about ethical marketing and...
Peter Schravema: (26:26)
Oh look, that was an issue relevant to the American industry. There were some things that I just don't understand about the American industry that the level of the marketing, it just blew my mind and that's because they have a dual system. They have a listing agent and then they have a buyer's agent, I'm going to call it a selling agent, operates very differently to the buyer's agents we have here. But the way it would work is the listing agent would procure the property, they would sign the listing form. They then put it out on the MLS and any agent who has a buyer attached, so Carly Davis wants to buy a three bedroom, two bathroom, double lockup garage that, they don't use that terminology by the way, but let's go for Australia. Carly would come to me and say, "Wat have you got in that area?"
Peter Schravema: (27:08)
I'd go and look at the MLS and I would take you to any of those. I'd actually guide you through the process and this is what you would do. And roughly 6% commission, the buyer gets half the listing agent gets half. That's kind of the way they work. As part of that process, though, the portion that they have absolutely neglected is the listing agents have gotten incredibly lazy at actually been able to market a house, to the extent that the NAR do not have an ethical marketing and photography guideline for any incoming agent. Very different to what we see here in Australia, where it's real estate 101 is you're taught how to market a house. That's not the case at all. In fact, they've completely dropped the ball and being able to market a house. So insert BoxBrownie here, we provide a solution for that for not much money, very fast, at a high quality.
Peter Schravema: (28:00)
So a lot of the poor marketing that we saw in the US, we've been able to solve that. Now, on the back of that, how do you actually market a house ethically? Should we be removing power lines at the very basis, all the way through to what is virtual staging? Is it ethical? Should we be scared of that? How does virtual renovation look? These conversations all came on the back of it because there was an unhealthy amount of fear, which was a roadblock to us entering the US market. We were viewed as some kind of waiver, which Dr. Bone, and the house looks better than it actually will, whereas that's not what we actually do. A lot of the things where our marketing tools to assist you in marketing your house. And all standard in the Australia property industry, things that aren't even disclosed in the Australia property industry by default is now disclosed in the American.
Peter Schravema: (28:56)
But they had a very infantile market. That sounds terrible, but they had a very infant-like market, I suppose, as far as marketing was consent. So ethical marketing, photography and copyright came on the back of that. It stunned us to know that most of the brokerages over there won't have an agreement that hands over copyright from the professional photographer to them if they are using a professional photographer. And that created quite a large amount of issues for the National Association of Realtors. There's a famous lawsuit that's still ongoing, Zillow verse VHT studios, which is the photography company and that has come on the back of agents not controlling the copyright for where their imaging goes.
Kylie Davis: (29:40)
Okay, cool. So, from a whole lot of conferences in 2018 around the US, this last year in 2019 you guys have spent a lot of time on the road, not just in the US but overseas as well. Do you want to tell us about your expansion into other countries?
Peter Schravema: (29:56)
Yeah, well, I mean our expansion into the US was a product of having Coronas on a Friday. We actually thought Mexicans drank-
Kylie Davis: (30:04)
A lot of the business you do, Peter, involves alcohol of some kind. That's all right.
Peter Schravema: (30:12)
I'm not going to argue with that. That is correct. But look, we were having Coronas on a Friday afternoon and we decided that the Americans also spoke English. So as a result of that, we put out a Facebook advert and that Facebook advert went viral, it was probably the one of the bigger catalysts to getting us over in the US that led to a relationship with the admin and a bunch of other things that came as a result of that. By the same token, we were well aware and our foray into UK, EU, Asia did not just start, it was just that the numbers game in America was so big and our focus target, the group of travellers that we had our reach as a company was so small that we had to expand all of our resources going to America. We always had our eye on other targets. Even New Zealand across, across the Tasman there is a large focus for us and we've grown quite large as a result of that.
Peter Schravema: (31:14)
So it was really a numbers game for us. We looked at 1.72 million agents in the US. Also, where I've openly stated that they're not marketing in a professional fashion in the way that Scandinavia and sort of certainly Australia and New Zealand do as a default. That became an instant access for us. They also had the sales and the way that they market the property, disposable income. There is more money in the transaction for us to suck marketing dollars out of. So our primary focus was on America, but yes, now we are very, very much focused on other countries. We are now in Spanish, Japanese and Korean. We'll have French and German by the end of the year and we're looking at Italian certainly towards the end of next year. And we find as soon as we go into those languages, the uses that we have in that area skyrocket. So that's definitely on our roadmap. We'd like to wear out as many languages as humanly possible and really see that that blow up in that space. And that's just one part of our expansion.
Kylie Davis: (32:16)
And you're also expanding into other industries, as well. So it's not just real estate. So you said motoring.
Peter Schravema: (32:22)
Yeah. This year we launched automotive. And that's going to be a slow burn and require a longer education campaign. It's almost specifically used car sales. Anyone who's bought a new car will know that all of the marketing is schmick. It looks amazing. It's straight up. So that particular areas in used car online retail. There's a lot of noise in that area. Amazon and eBay already have their providers, so you know, we're not openly going head-to-head with them, but we have this workforce that can obviously do it, so that'll be a slow burn as well. And fashion was one that took me by surprise. As you know, I'm not very fashionable. I wear black and maybe jeans. You shaking your head.
Kylie Davis: (33:05)
It's a very stylish BoxBrownie tee shirt that you're wearing, just so our listeners have a visual.
Peter Schravema: (33:11)
And that's pretty much what I'm limited to. I'll put a coat on and sometimes I've been known to wear a tie much to Peterborough is discussed, but the-
Kylie Davis: (33:20)
I've never seen you in a tie.
Peter Schravema: (33:22)
Yeah, there you go. I do, but rarely. So the online fashion industry, we were not aware, uses CAD to develop fashion garments. Who knew? Not me. So after a conversation with a large portal that said, look, what we're trying to do is develop all of these new garments by using CAD, which we use for renders of new construction, CGIs and renders, but we began developing products along that line.
Kylie Davis: (33:49)
Let's just take a short break and now a word from our sponsors.
Speaker 3: (33:52)
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Kylie Davis: (35:00)
So, going back to Australia, what's your adoption like in the real estate space with agents? How many photos do you touch up or edit each year or what are some numbers around that?
Peter Schravema: (35:14)
Well, Australia is our second biggest market, which is really saying something because your numbers game is really small and you've got 55,000 agency and for you to be second biggest ahead of Canada, that's some play. So you know that we have some people here who we're in debt to sunshine coast community where we live and Queensland in general is one of them. We're really strong up here in the Northern States. They know our product. A lot of them have been Guinea pigs for our various products and really seen how poor we were at the start at actually doing this. So that's why I say we're in debt. We've got absolute love for the Queenslanders and how they've I guess worked with us to see it grow. Now most of our market saturation here without going to direct numbers, but most of our market saturation in the image enhancement, because it's a product by product play in the image enhancement play would happen in our property management. And we really stuck to the property management circuit here because they don't seem to have the budget to market a house correctly.
Peter Schravema: (36:18)
A lot of them are still taking photos of themselves. We solve that problem for $2 an image. We have a bunch of other plays that come as part of that. Our twilight conversion's used quite heavily all Australia wide, so there's doesn't seem to be, but you know, that's a $5 product. It's not a great expense. You only really need to do one per property. And we've got a bunch of statistics, courtesy of our mates of the REA group, that forged part of that. Floor plans has been a massive play here. We have a huge floor plan culture in Australia and New Zealand, whereby there's a floor plan on just about everything. Whereas the adoption rate in the US is 5%, 92% of listings here have a floor plan.
Peter Schravema: (36:59)
Nine out of every 10 buyers would ignore a listing if it didn't have it. If you're not putting a floor plan on in Australia and New Zealand, you're a bit of an idiot. So we solved that problem quite cheap, as well. Virtual staging is something that tape has taken off recently in the Victorian and Sydney markets and certainly is also used quite a lot in metropolitan regions of Western Australia, being Perth and Brisbane and certainly in Adelaide, as well. But beyond that in Australia, that's our current play. So we've soaked, I suppose, a large amount of market share up here based on the fact that the Australian market is quite small in comparison to others.
Kylie Davis: (37:38)
Yeah. So we often hear, though, that the Americans are better at adopting technology than the Aussies are, especially in the real estate space. What's your view on that?
Peter Schravema: (37:46)
Oh, well I certainly, I don't know if better's the word I'd use, they are quicker. They are definitely quicker to adopt. Most Americans have an average of 25 to 30 pieces of technology that run inside their office. About 18 of those I think are not utilised to even a minimal capacity. And I was speaking to our mates at Market Buy, John [inaudible 00:38:12] and Dave about this some time ago, that they estimate there's a similar percentage not using technology in general, whether that's a CRM sort of at you might [crosstalk 00:38:24] 10% capacity. So what I would say is the Australians are very, very much sceptics when it comes to adoption. They will choose not to adopt the old adage of if it ain't broke, don't fix it. That would be the first attitude of most Australian principles.
Peter Schravema: (38:44)
Whereas in the U S it would be there's a new player on the block. It's exciting. I want to appear to be an innovator. I must have that technology. It's kind of like going out to buy the new iPhone. Australians will be sceptical. We have a higher rate of Samsung use here because we love our old tall poppy syndrome, where they're doing really well. I'm going to go and buy something else. And I'm one of those guys, I won't go out and buy the new iPhone. I'll wait for them to fix it over the first two months before I go and get it. That is very much a play, an apathetic sort of, but also measured approach to new technology, which I like. I do think that we miss a trick sometimes because we were slightly late on the punch and the people who've come in first may have bought the organisation or figured out hoy, they have a competitive advantage to to anyone in their area by actually using it.
Peter Schravema: (39:38)
But this is six of one [inaudible 00:39:39] I've watched agents in the US adopt things really fast that have actually destroyed large portions of their client base or their lead generation, which they talk quite a lot of over there, or even their operational capacity. And I've seen the opposite of that happen in Australia. I've seen some businesses go under here because they haven't adopted tech and they've been stuck in filing cabinets using systems that are well and truly outdated when there's a great available range of technology sources that they should be looking at.
Kylie Davis: (40:12)
So what do you think are the biggest challenges of PropTech space in Australia at the moment?
Peter Schravema: (40:19)
Look, I mean coming up with [crosstalk 00:40:20] not necessarily. I think coming up with, the hardest thing to do as a PropTech is coming up with something that's new or even appears is new. Something that's different, something that's fresh and clean that no one else is doing that also applies to a market bigger than the one that you just in. I think that's probably the biggest challenge I see, a lot of PropTech providers come up with excellent ideas for Australia that don't necessarily float in the biggest market in the world. I also see a lot of PropTech companies try and jump to the US, I'm speaking from a PropTech company that has done really well out of the US, but that's not necessarily the bag. If you look at what Inspect Real Estate have done out of Brisbane in the UK, they've probably made a really smart decision for their product to go to the UK and actually to implement that technology over there ahead of the US. That's not to say that they won't make it in the US, but it doesn't always have to be America that you have to go to.
Peter Schravema: (41:22)
I know their numbers game's big but look at the market. Measure the direction that you're going. But yeah, in answer to your question come up with, I'd like to see some really fresh ideas that solve problems that are different to what other people are thinking about. Think outside the square. And that's easy to say. When we never thought BoxBrownie was going to be as big as [inaudible 00:41:46] it did. Who am I kidding? I could be slow. It could have been slugging away at this for ages if we hadn't had Coronas and thought to go to America. And it was a throwaway comment. We got lucky. Yes, we've been quite calculated in what we've done and it's been a hell of a lot of hard work I know you've seen, but all of that aside, I've seen other PropTech vendors put in the same amount of hard work I've done and not reap the same results. So there's a large amount of luck and I can't sugar coat that. That's the way it is. If you have a really good idea and you can find a niche market for it, then you could be happy doing that for some time.
Kylie Davis: (42:28)
Fantastic. So one very last question, Pete, because I'm actually dying to know the answer to this. Just how many frequent flyer points do you have? And is this lifestyle sustainable of constantly being on an aeroplane?
Peter Schravema: (42:40)
Look, no, it's probably an answer to your last question first. No. I need a holiday. I've caught up 430,000 miles in an aeroplane this year. I think that's 600 and something thousand kilometres. That wonderful. And that's 22 and a half or 23 times around the globe. So that's a fair whack of time on the plane. I'm blessed by the fact that I don't get jet lag. I very rarely show fatigue. In fact, I only really sleep three or four hours at night, which I'm sure is not wonderful for my health, but that's been the way it always has been. I was kind of perfect for the role here in doing that, which I didn't realise, but that was the case. Probably not sustainable. I have a wife as you know, and three children here at home and I have to constantly come back and introduce myself to them. And they're an integral part of BoxBrownie as well, not a lot of people see the spouses or the children that are behind our company and we couldn't do it without them. So you really need a supportive team. Frequent flyer miles are not worth anything.
Peter Schravema: (43:50)
They just, we're with one of the two large providers without mentioning names over here and I've never received a seat upgrade. I fly in economy. Not a single time have I ever been given a, you're upgraded. I get lovely lounge perks. I've come to stop expecting it. I just think the nature of what it is is what it is. We've looked at other companies that we could go to. We're well-suited by the provider who is based in the area that we are in. It gets us to out our largest market, which is the US but that could change in the future. The airline industry is competitive. Unfortunately, we are on this massive Island down at the bottom of the world where no one really comes to. There are only really two providers servicing it, even though they have alliances behind them. So you've got to reconcile the fact that if you want to live in the best country in the world, being Australia, you got to put in the hard yards if you want to get somewhere else to the neighbour because aside from New Zealand, they're all a long way away.
Kylie Davis: (44:54)
They all are a very long way away. We'll look Pete, welcome back to Australia. I'm glad to hear that you're home for a little while. I think it's hilarious that you're about to have a caravan holiday. I think that probably says-
Peter Schravema: (45:04)
I couldn't stay in another hotel and I didn't want to get on a plane.
Kylie Davis: (45:08)
No, fair enough.
Peter Schravema: (45:12)
I didn't know what to do with that.
Kylie Davis: (45:14)
Fantastic. But look, thanks so much for telling us about BoxBrownie and it's been great chatting to you, as always.
Peter Schravema: (45:20)
Thanks for having me here. I can't wait to catch up next time and [crosstalk 00:45:23].
Kylie Davis: (45:25)
Do you know what? I think this actually might be the first time we've had a conversation without a beer.
Peter Schravema: (45:30)
I can change that. I've got a tap in there. It's only 10:54 in the morning, but that's never stopped us.
Kylie Davis: (45:37)
It's never stopped us before. Anyway, thank you so much for your time.
Peter Schravema: (45:41)
See you later.
Speaker 3: (45:42)
So that was Peter Schravema from BoxBrownie, an Aussie PropTech that is kicking huge goals globally by doing what Pete specifically explained, editing photos. I love the BoxBrownies and I think their story has some great lessons for everyone in PropTech. The first is that the founders of the business, even though they may have been extraordinarily talented and brilliant, were not necessarily the ones who were able to escalate the growth. Sometimes you need someone with a different skill set on your team to really help fulfil the potential of the business. There's a fantastic synergy between Brad's photographic expertise, Mel's extraordinary technical knowledge and quite freakish ability at maths, and Peter's sales and relationship skills that ensure that that business is really solid. And the second lesson is around the extraordinary work ethic of the brownies. Like Peter said, those guys show up. And when other people on the trade shows are turning up late because they're a bit hung over, the brownies are always there.
Speaker 3: (46:40)
The international conferences sound really glamorous initially, but that gets old really fast. But the brownies have really invested in showing up in contributing their knowledge, both to the NAR Reach programme and to those conversations around copyright and ethics of photography, and by really getting out to where their customers are and taking part. So they've paid to attend the trade shows, they've demonstrated this stuff repeatedly, 300 travel days in a year is just an extraordinary amount and they've really done the hustle. And the third thing I wanted to point out is their generosity as a company. So the team at BoxBrownie are fantastic hosts and wherever they are, they make people feel really welcome, whether that's on their booth, in a bar or by the pool. And if you're ever in Australia and hitting to an overseas conference, look for the brownies. They will embrace you in a warm hug.
Speaker 3: (47:29)
They're great ambassadors for Aussie PropTech, and they're generous in how they share their knowledge, which we heard today in spades. So if you've got a question for Peter or the BoxBrownie team, reach out in the show notes below and I'm sure they'll get back to you. So now if you have enjoyed this episode of the PropTech Podcast, we would love you to tell your friends or drop me a line via email, LinkedIn, or our Facebook page. And you can follow the podcast on Spotify and Google podcasts. I'd like to thank my audio support, Charlie Hollands and the fabulous Jill Escudero and our sponsors Beepo, who make outsourcing easy, and HomePrezzo, who turn your data into amazing marketing content. Thanks everyone. Until next week, keep on PropTeching.
Content marketing strategist, researcher, journalist and presenter specialising in the real estate industry. I'm passionate about proptech, digital disruption and all things property, big data, leadership and entrepreneurial ideas, have an MBA and specialise in social and digital media content creation and automation.