Latest / Success Story with Scott Clary / Michael S. Liebowitz - Serial Entrepreneur | How Taking Calculated Chances Built a Business Empire

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Michael S. Liebowitz - Serial Entrepreneur | How Taking Calculated Chances Built a Business Empire · Success Story with Scott Clary

• 0:00
  I was fearless at 21. I grew up in Staten Island, very modest beginnings. I grew up always
• 0:05
  wanting to kind of get out of that. Doing that at 21 was tough, but I never afraid of it.
• 0:10
  Michael S. Lieberwitz is the president and CEO of Douglas Element Inc. with over 25 years of
• 0:15
  experience leading companies in insurance, finance, and real estate. He's the founder of Harbor
• 0:20
  Group Consulting and has redeveloped iconic properties like the Mondrian South Beach Hotel.
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  When I came into Douglas Element, number one reason that I took this role, Douglas Element
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  brand, best brand in residential real estate, by fall, has a 10-year-old. I always saw myself
• 0:35
  as Captain Kirk. I thought like the only way I was really ever going to be the CEO was it had to
• 0:40
  become it myself. It just started selling insurance and then created a business out of. We handled
• 0:45
  the insurance on the World Trade Center before 9-11. That business after 9-11 went through the
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  a seasoned entrepreneur and investor. Michael also supports causes like Make a Wish and the
• 0:56
  Baskham Palmer Eye Institute. In this episode, we dive into his journey of building,
• 1:00
  leading, and scaling high-impact ventures. The successes are in the failures. I think it's hard for
• 1:05
  people to really like leave that. You can't do a good deal with a bad guy and you can't do a
• 1:10
  bad deal with a good guy. If you do everything that you need to do, the result is your stock will go up.
• 1:15
  Don't worry. Worrying is the worst thing you can do.
• 1:21
  Welcome to success story. I'm your host, Scott Clary. The success story podcast is part of the
• 1:26
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• 2:31
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• 3:16
  Michael, let's do this. Okay. So you built your first empire at 21. You sold a company for a very
• 3:24
  big number. What made you hungry enough to take on Douglas Eleman's crisis?
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  Well, it didn't become an empire to later on, right? At 21, it started modestly.
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  Douglas Eleman is, it's not a crisis. And I think that when you're that age, you're fearless.
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  And I was fearless at 21. I grew up in Staten Island. You know, very modest beginnings. You know,
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  my dad was a New York City cab driver for 25 years. He ended up getting out of that for a little
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  bit of time and did, you know, did some more things in his life. But, you know, so I grew up really
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  always wanting to kind of get out of that and be successful. And he had some friends that were,
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  you know, from some interesting backgrounds and were really good influences on me. I'd always
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  stressed legitimate business and education. And when I say legitimate business, obviously going
• 4:21
  to say what they were doing. But they had a profound effect on, you know, on who I am and my
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  motivation. And, you know, doing that at 21 was tough. But I never, I was never afraid of it.
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  And coming into the Douglas Eleman, you know, business is, again, I, you know, listen, I would
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  call it challenges, right? The residential real estate business has a lot of challenges to it.
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  Douglas Eleman, you know, had a long time leader. And, you know, I had to fill that role,
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  which was, you know, a big act to follow. And I looked at it as a challenge. I didn't look at it
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  in any other way. So if you think about it, so just to walk through your entrepreneurial career,
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  you built, you're an operator, you can build from scratch. And maybe crisis isn't the right word,
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  the opportunity. But still it's a pivot from what you've been doing your whole life at this point,
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  right? You are not building from scratch. You're stepping in to an existing framework,
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  existing organization. I have no doubt you could have built after I exist. You could have built
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  something from scratch. So I guess the question is, even for people trying to navigate their career,
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  how did you think through the opportunity? If you have the capability to build from scratch,
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  why would you go into an opportunity that's already molded? And there's like rigid structure
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  in place because sometimes entrepreneurs have a tough time in existing structures. Yeah, I mean,
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  that's a really great question the way you pose that because I did. I built the business of scratch.
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  I was the first employee in the business. And that is really hard, right? And ultimately I built a
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  brand within that business. And I always used to say, you know, to myself that, you know,
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  can you imagine if I had, I used to use Aeon, which is the number probably two largest insurance
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  business in the world. I always used to say, can you imagine how much I could sell if I had Aeon's
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  banner above my head? You know, that I had to create my own banner. And when I came into Douglas
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  Element, I will tell you the number one reason that I took this role was that the Douglas
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  Element brand was a built brand already internationally known as far as I'm concerned synonymous with
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  luxury real estate. And the best brand in residential real estate by far, by far. And it was like the first
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  opportunity for me as a person that had to build a brand from scratch that I almost felt like this
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  is going to be easy. I already have the brand. All I need to do is take the brand from A to B.
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  So it's interesting that you asked that question because that was the exact thinking in my mind.
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  When I took this role, I thought of how hard it was to start from the beginning on my own,
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  build my own brand within an industry that was very institutionalized insurance, right? I mean,
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  there's not a lot of big players in the insurance distribution, consulting, advisory space.
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  And so I was, would say to myself, my God, I keep saying I had a brand to build like, to me,
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  that was like starting on third base. You know, so it's interesting. It's an interesting
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  conversation because there's so many ways to quote unquote be successful in life. And I think that
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  the sort of like the 21 year old you so you built this insurance empire. I don't think you
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  had any money at the beginning when you first started building that crack. It was like, I have no
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  money. And honestly, like there was some jobs available at that time to like go work in.
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  You know, obviously there were, you know, beginning jobs, you know, starter jobs,
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  but also in my mind, I never really thought I always thought I had to kind of create my own job.
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  Like I never thought I never like whatever, you know, I went to CW Post, which was like, you
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  know, school in Long Island. It wasn't really, you know, I didn't go to Yale. I didn't go to
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  Harvard. I didn't go to an Ivy League school. And I couldn't, I didn't think I could go to
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  Goldman Sachs or JP Morgan and get them to hire me at that age. And I was thinking like that.
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  I just thought I had to do, I don't, I didn't think I had a choice. I thought like the only way
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  I was really ever going to be the CEO was I had to become it myself, you know, and I always saw
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  myself. I was a big Star Trek fan, right? As a kid. And I, I always, as a 10-year-old,
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  I always saw myself as Captain Kirk. I didn't see myself as Spock or Scotty the engineer.
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  I was always Captain Kirk. In my own crazy mindset, look at it. I thought it looked like I'm a little
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  bit, you know? So I always wanted to be the CEO. So to me, starting my own business right out of the
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  gate was the only option for me. So the first business you started was the first version of it
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  successful or did to go through multiple because I'm talking about people that go through,
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  you know, a hundred different ideas that don't work before one does.
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  Yeah, it's interesting because it was, I mean, my first thing that I did was I actually took
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  some share to his party because we work, became we work, but I actually took a desk in shared space
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  that was near where I lived. And I remember I called the business MSL. Those are my initials.
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  MSL associates that made myself a little business cards. I had an office. I went to the office
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  and I had a couple of relationships that I had and I sold them some insurance.
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  And that's how it got started. And it was a simple start.
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  It was a hundred different types of business. They don't have a hundred different ideas.
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  They're also there. I'll give you an example. I sold this one business multiple times. And in
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  the last sale, there was some, there was some crazy tax rule that one of the lawyers found
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  that like could have like made me pay a certain amount of tax. I don't remember what the story was,
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  but we had to find our original incorporation documents to find that it was like a 30 year rule
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  or something. And we had to find our original incorporation documents back to when I started
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  the company. And we ended up finding them as crazy as it was. But like that was the original
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  business. So there was no, I didn't have a, oh, I started this business. I failed. I had to
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  start it again. No, I just started selling insurance and then I sold more and I sold more and
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  then I ran into another opportunity by accident that I created a business out of that ultimately
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  became a business that was I sold multiple times. The last time I sold in 2018 was for, you know,
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  a real number. And no, it was from the beginning. That was it. I didn't, I didn't have a business that
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  failed. I love it. I think that that's, I don't think that's very common. I think a lot of people
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  just go through multiple iterations of trying something. But I also think that people give up
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  too soon as well. I think it sounds like you just grind it out and figured I'm still grinding it
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  out. I'm okay. I'm sorry. Yeah. Today I'm grinding it out. But the funny part about that is,
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  is that I also look at the people that go through, I actually spoke to an insurance,
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  a real estate agent a few days ago about coming to Douglas Almond. And he was a guy that had
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  multiple business failures in the residential real estate business. And he was going through with me
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  the issues that he had like they were a problem. And I said to him, I'm, I love the fact that you
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  went through all of this in your life. And he goes, well, I mean, I said because you know the
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  successes, you know the mistakes, you know the things that you have to do, you know the fact that
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  you've been through it all, you're more valuable to me. Okay, because you've been through it,
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  because you bounce back, because you kept going, you know, the successes are in the failures,
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  right? So like I think it's hard for people to really like believe that. But the truth of the
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  matter is is, and again, listen, my overall businesses were successes, but within those successes,
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  we had things that, you know, we didn't do as well as we thought we could have done that we fixed
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  then we went back and tried again. And that's what it's all about. You know, my dad used to say
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  it was a reason they put a racist on pencils. Okay, because we don't have pencils anymore. Okay,
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  but people make mistakes. It's okay. You know, something that's interesting because
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  you bought back your business and then resold it and bought it. So I'm curious about how that happened.
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  But, you know, reading between the lines, when that happens, it usually means the person who bought
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  it didn't do that well with it. And then there was an opportunity for you to reacquire. And I see
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  this happen more often than not. So I'm curious if you pinpointed, at the personality traits of an
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  entrepreneur that allows them to be successful when someone else with a lot of resources and capital
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  can't be. Yeah, listen, I think that there are people that come to this country that don't know
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  a single person. They don't know the language, right? And you hear this story that they drove a
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  cab for a year and then they became a billionaire, right? I mean, there's a lot of those stories
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  out there, you know? And at the end of the day, the one common denominator between the people
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  that are incredibly successful and aren't his work ethic, you do not have to be the I don't think
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  I'm the smartest guy in the room. Okay, I think there are plenty of people that'll go and take a
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  math test or a reading comprehension test and we'll get a better score than me, but you are not
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  going to overwork outwork me. Okay? And the people that I am around now, I don't think I used to
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  my use to the level of work that I do. The people that I had a big team that worked with me in my
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  previous businesses. And we all ran at the same pace. I actually joke around people that say to me,
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  how did you get such an amazing team? And I was I created them in my basement. Like I created
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  those people. And what I mean by that really is I'm joking, but, you know, success brewed success,
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  the people that are with you learn your habits and the people that can live in that environment are
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  the ones that are going to be the successful ones and keep going and stay with you and all that.
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  And at Douglas Elliman right now, I'm in that phase of finding and discovering the people within
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  the organization that could run at this pace. Okay? And that are totally committed 24-7. I gave my
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  life to my career. And that's where it takes. And if anybody thinks, you know, people talk about
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  work-life balance, yeah, you can have work-life balance. I play sports, I do things and all that.
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  But you really have to be willing to dedicate all of it if you really want to be truly successful
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  unless you can invent a vaccine or something, you know, and I'm sure that would take 24-7 too.
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  But if you're in like the block-and-tackling business of sales and brokerage, you know, or
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  advisory, even if you're a lawyer, or you're creating another business, whatever that may be,
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  it is a life commitment. That I think that I also think that there's seasons to your life. Like,
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  what people get wrong about balance is they want balance their entire life. I think that it's okay
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  where there's a point where if you do want to spend more time with your family, that's okay,
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  but no, that's going to take away from your ability to put hours into your work. So when you're 20,
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  30, maybe even, you know, late 30s, you put all of yourself into your work to build this foundation
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  that's going to let you on the back half of your life take a little bit of a break if you want it.
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  I think that the issue is that people want this easy soft life from right out of university or
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  high school. And they're never going to get the life they want if they think like that.
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  Yeah, well, it's funny. One of my college roommates, dad, when we graduate in college, I remember
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  he said to us a graduation and he looked at both of us and he goes, pay now, fly later.
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  I like that, right? I never forget. There's so many, you know, I've been lucky that this I've had so
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  many sort of mentors or people that have said things to me and I really, really take it in. And
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  it's the truth. But like, that's what people say to me. The same thing now is like, why aren't you
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  you know, sitting back and relaxing and all that, you know, but you've done so much you could
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  if you wanted to. I can never work. I could promise you that. I never have to work again.
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  I'm not doing this for any of it, but I was never really in it for, I was never in it for the
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  dollars. Never. Talk to me about as much as you want to share about the selling, rebying it back,
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  selling it again. It's very strategic. I don't think many people have experienced that, but it's
• 16:45
  an interesting concept. So that obviously worked out. It paid off very well. I don't think it was
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  planned probably from the first time, but it should happen. So what was the, what was you built this
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  in company? You sold it the first time. I walked through it was a private equity, strategic,
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  and then what happened? Yeah. Um, what happened was I had started multiple companies, but
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  and I end up selling all of them to this. I ended up merging them into a company called
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  National Financial Partners that was created by Apollo, the investment fund. So I said, I was 21.
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  I'm not 28 years old. And a partner of mine calls me and says, Hey, Apollo is looking to do
• 17:24
  a, what they called a roll up back then. Nobody likes the word now, but it was, it was a role.
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  Is that a bad word now? Yeah. People would always say there were roll ups and bad word because
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  all it is is really putting companies together. It's not really creating anything.
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  It was not enough value. It's just the financial, yeah. I'm, you know, thank, right?
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  So they came to me. I was 28 and they said, you know, we're putting these companies together.
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  There's five or six people we put together. We'd like you to do with us and roll your businesses
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  into this business and you'll take back stock and a private company. You're going to make less,
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  a lot less money than you were making. And, you know, I was 28. I had already, I was already
• 18:02
  making a lot of money for someone 28. And, um, but I had to take all these steps back. And I said,
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  well, I don't really need to be doing this the rest of my life. And I really didn't want to be,
• 18:13
  and I wouldn't fret out the door always. I was always looking for the next kind of thing in my mind.
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  I always thought it was a bigger frontier for me than insurance. So I agreed to do it. And we
• 18:22
  created this company called National Financial Partners. But ultimately when public, this was
• 18:27
  1998. We went public in 2003. I ended up buying back three businesses from them. I left one of them
• 18:37
  there in 2000 that during the financial crisis, 2010, our stock, we had a $55 stock. It went to
• 18:44
  like 80 or 90 cents all of my subsidiaries that I was a CEO of were still making a lot of money.
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  I said to the management, him, guys, you know, you paid me already. We've all made a lot of money.
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  I don't need to do this anymore. I think I'm leaving. I'm going to go do something else. And they
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  were like, well, what are we going to do with these businesses if you leave? I was wondering.
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  This was 2010, 2009. So I was like 30, how old was I was like 40. Okay. So he put some time. I was
• 19:13
  there for 11 years. Yeah. Okay. I was there for 11 years. And amazing people. I still speak to
• 19:17
  all of them. Amazing, amazing people. So, but I said that in an honest way, like guys like, you know,
• 19:23
  you kind of blowing the place up, our stock is, you know, whatever. And there were things that I had
• 19:27
  said to do that I thought that they didn't listen to. But it was all it was in an amicable way.
• 19:31
  They were like, well, what are we going to do with these businesses if you're not here? So they
• 19:33
  were like, why don't we sell you back? Let's figure out a deal. Well, you take back three of the
• 19:38
  businesses. One of them, which was a property and casualty business, which was their largest
• 19:43
  subsidiary at the time. We'd left there in that we left it at the company. I didn't buy that one
• 19:47
  back. I bought them all back. So the market really changed on them. It was the financial crisis.
• 19:54
  And that's how I got the business back. I got back three of them. One of them I still own
• 20:00
  today, which is a pension administration business. The other was a program insurance program
• 20:05
  business for New York condos and co-op buildings. And the other was an advisory consulting
• 20:11
  business called Harbor Group, which was the one that really was the blowout business that did
• 20:17
  incredibly well that I created from nothing. I was doing a favor for someone in 1994 and I saw
• 20:26
  a business in it. And I ultimately created the business. I had a guy that worked for me. Those
• 20:30
  were really smart guy that I wanted him to really spearhead that and he thought there was nothing
• 20:36
  in it. And I'm like, all right, you don't want to do it? I'll do it. And he really didn't see it.
• 20:41
  And it ultimately became a very large insurance advisory and consulting business. We had
• 20:47
  every major, we were basically insurance diligence to lenders in the CNBS commercial
• 20:53
  mortgage backed securities world. And it became a very big business. We had every major client
• 20:58
  from Goldman Sachs to JP Morgan to UBS to Bank America. We did business internationally,
• 21:04
  matter of fact, we handled the insurance on the World Trade Center really 4-9-11. And that
• 21:11
  business after 9-11 went through the roof. I testified in both World Trade Center trials.
• 21:18
  Matter of fact, before, you know, there's a really interesting story behind it where I wanted
• 21:24
  them to ensure the buildings for the full value. And Larry Silverstein, who was the guy that was
• 21:29
  buying it, thought I was, they thought I was crazy and it was going to raise their insurance
• 21:33
  premium through the roof and it was going to kill the deal. And they yelled and screamed
• 21:36
  to me, I was 29 years old at the time. And they were pissed. And I wanted them to ensure the
• 21:43
  building contemplating both buildings going down. And we read a meeting before 9-11 and they said
• 21:49
  to me, what do you think is going to do, you know, yelling at me almost? What do you think is going
• 21:54
  to happen that these bills have come down? So what happens if a 747 is the bill then? And they
• 21:59
  pulled out some engineering report that they had that said, you'd have a $600 million loss.
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  And I go, I don't really care about a maximum probably lost study, which is what they showed me.
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  And when I was, when I was questioned in the deposition after it happened for the trial,
• 22:17
  David Boyz, I think it was, maybe it was David Boyz. I remember it was David Boyz or somebody else.
• 22:20
  So, you know, it was a big time. And we had the biggest lawyers in the world on this case said to me,
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  are you the one that said that a 727 hit the build building? I go, no, no, I said 747.
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  To me, that was the only thing that could have brought those buildings down. So the result of my work
• 22:37
  on that really just that business just went from a business that was making a few $100,000 a year
• 22:45
  to a business that was dropping 20, 30 million dollars a year to the bottom line. And within
• 22:50
  instantaneously, every lender started calling me saying, hey, we need GMAC was my first client
• 22:56
  in that business. They were the ones that financed the World Trade Center. They were the most
• 23:00
  unbelievable client. I never lost that client up until I sold the business. I lose them as a client.
• 23:06
  I did every single piece of business for them. I advise them on every single deal, Goldman Sach.
• 23:11
  I mean, every lender we had, we did all of their work. And banks like that don't hire one
• 23:15
  anyone. But we were so good at what we did and so specialized that we worked for exclusively
• 23:22
  for these major banks. And it all was, you know, it started before 9-11. But once 9-11 happened,
• 23:28
  you know, I ended up getting incredible notoriety from it. And we really took that business to
• 23:32
  the next level. How did you even 29 get in the rooms so that you can negotiate a deal on the World
• 23:38
  Trade Center? That's still young. That's wild. Yeah, you know, it was interesting about it. There was
• 23:43
  a woman who we got the business from. So I got the business because somebody I was doing,
• 23:49
  somebody who was a brokerage client in mind when I was like 24 or 25 was selling loans to Smith
• 23:54
  Barney back then. He remember Smith Barney. So it was a long time ago. It's only, I really
• 23:58
  exist anymore. I was selling loans to Smith Barney and he left and he went to work at GMAC.
• 24:04
  And he asked me to do him a favor and he said, listen, can you review this for me? I'm like,
• 24:07
  I don't really do that. But I was a young aggressive guy. I'm like, I'll do it for nothing. Don't
• 24:11
  worry about the painting. And I did it for him. I did one that I did two. He's like, no,
• 24:14
  let's pay you. I'm like, no, it's fine. I was just so happy to have their brokerage business
• 24:18
  at the time. And they say, I'll pay when he paid me 200 bucks to do it. And I was like, okay, fine.
• 24:23
  So then I started charging for it. He leaves that firm, small firm and goes to work at GMAC
• 24:29
  in Horsham, Pennsylvania. They would just, it was the birth of CNBS,
• 24:33
  securitized lending at that time. But nobody was doing it other than Nomura and them.
• 24:37
  I get a call to go down there and I meet with this woman who was a Catholic school teacher
• 24:41
  before she was a banker. And she said, she's walks under, she sits down with me,
• 24:46
  she asks me a million questions. She gives me a test to take home. I end up sending it back
• 24:52
  and I do it. I send back like a 40-page of stuff. She calls me back and makes me drive back
• 24:58
  down to Horsham. I'll be in New York at the time. I say where she goes, you know, you did,
• 25:04
  I put you up against two other firms. You sent back the best report by far. She goes,
• 25:10
  but we're general motors. We don't hire one anybody. And I'm not allowed to ask you how old you are.
• 25:16
  Okay. But I know you're young, but I'm not going to hold it against you. And I'm going to hire all
• 25:22
  three of you. Okay. After two or three months, I was so all over this thing because I'm now
• 25:29
  this 24-25 year old kid with general motors acceptance cooperation as my client. I can't even,
• 25:36
  I can't even believe I'm in the room. I even have this opportunity. And again, we were getting
• 25:40
  a few hundred bucks to do. I think I was charging them 400 at the time. After a few months,
• 25:46
  they got rid of the other two. None of the bankers wanted to deal with these older guys. And they
• 25:50
  gave it to me. I ended up getting all of it. I got the whole account. It started becoming a
• 25:55
  business. They were my big client. And then when World Trade Center came along, I was their guy.
• 26:01
  Okay. And this was the biggest CNBS zone at the time. It was $833 million was the loan,
• 26:06
  giving the exact amount. And they gave it to me. What else do they even use anybody else?
• 26:11
  And I will never forget after 9-11, they called me so, you know, grateful for that. I was all,
• 26:19
  I mean, I just gave you a snippet of what went on and why we got those bill. We got, we made them
• 26:24
  ensure the buildings for $3.6 billion, which ensured both built buildings at full replacement cost.
• 26:30
  Okay. And that's why the World Trade Center got rebuilt. If we would have not done that and did
• 26:36
  the loan amount 833 million that Silverstein wanted, that would have been the only cover to what
• 26:41
  it had. Okay. So I went to a meeting at Silverstein's office four days after 9-11 and the CFO of
• 26:49
  his company walked in and he goes, I hated you until 9-11 because I made their premium go from
• 26:56
  5 million bucks to like 15 million. And the World Trade Center got rebuilt because we had 3.6
• 27:02
  billion dollars of coverage. And then the only reason that there was the trial was they tried to
• 27:06
  sue and say we should get 7.2 billion because it was two airplanes that hit the building,
• 27:12
  meaning that it's two occurrences and we should be paid twice. That was the logic behind the whole
• 27:17
  thing. It ultimately ended up being settled in a negotiation and there were two trials, but
• 27:22
  it's a fascinating story, the whole story. I mean, I could talk about this. This is one thing
• 27:26
  of my story. For two hours about all the intricacies of how it went down, but it really put my
• 27:32
  insurance career on the map and I ended up becoming the go-to insurance advisor to every major bank
• 27:39
  in the world by far. And with like literally 90% market share. That's absolutely wild. That is,
• 27:46
  I mean, there's not too many, I guess the lesson out of that is you just put yourself in rooms
• 27:54
  and you didn't give a shit about the money. You just put yourself out there and that's the
• 27:57
  the downline effects of that where 90% market share. And from there, we literally did every,
• 28:03
  I mean, the largest financial real estate transaction we did was a 40 billion dollar transaction
• 28:08
  with equity office properties in the middle of the financial crisis. You know, Harris, the hotel
• 28:12
  company, I mean, the Venetian casino. I mean, every single transaction, major transaction,
• 28:18
  we handled every one of them, everyone. So it was a really amazing business. And at the same time,
• 28:24
  I also had my other business. I had my other insurance brokerage services business. So they're all
• 28:28
  going at the same time. They're all ripping at the same time. So you never had an issue. I mean,
• 28:34
  I'm sure in the moment, it was a little bit stressful for like a 20-some year old to deal with some
• 28:39
  of this shit. I mean, that's not. I didn't sleep the night and 9-11 because I was really worried
• 28:44
  that like, oh my god, did I, did I miss something? Did you do it right? Yeah, I don't know if I
• 28:49
  miss something. I'll never forget driving into the city. I lived in Long Island on, you know,
• 28:54
  September 14th. I think it was a three days later. There wasn't a car in the road. There wasn't
• 28:59
  a person in New York City. It was a barren place. But I will tell you the night of that, I was,
• 29:05
  I did not sleep that night. I was going through all my files, just rechecking it, you know, so
• 29:10
  concerned. And then there was obviously litigation. You know, Jim, he gave me the lawyer they paid
• 29:15
  for it. They were the most unbelievably loyal. Unless I did my job and all that, but you know how
• 29:20
  things go. Yeah. And naturally start pointing a finger like seven points. They were loyal. They
• 29:24
  never questioned the thing. They were loyal to, they were so loyal. You have no idea what amazing
• 29:30
  people. I still know a lot of them. I mean, I still speak to, they're now called Bercadia. It's
• 29:34
  owned by a joint venture of Jeffries and Bercadia. It's called Bercadia. But I didn't sleep that night.
• 29:39
  I was worried about it. It was very stressful testifying in the World Trade Center trial. You
• 29:44
  know, the best lawyers in the world are on that case. And I was a young guy. Okay. Like I said,
• 29:49
  I, when I did the deal, I was like 29. When the trials happened, I was 31, 32. It was, it was
• 29:56
  tough. It was tough, you know. So now, I mean, after that, stress is all very subjective like that.
• 30:03
  It's a stress taking on big opportunities. All very subjective compared to that. You know,
• 30:08
  I mean, that was a big one. I think that's it. I think there's probably more than most people
• 30:11
  deal with in their life. I don't think many people have to deal with that kind of money at that age.
• 30:15
  Okay. So fast forward a little bit. That's the story of how you really, that's that was like
• 30:21
  the thing that gave you all the momentum. And then, you know, it's, it's all history after that.
• 30:26
  You bought and sold the company multiple times. The last time that you bought and sold,
• 30:32
  and what was the last transaction before you were like, I'm done with this. I'm moving on to
• 30:36
  a different part of my life. 2018. I had, like I said, I had three businesses. I'm actually four.
• 30:43
  I sold in 2018. I sold two of them to a very large insurance business, like a $20 billion
• 30:49
  company. And that was in 2018 and 2019. I sold that other one, the program business.
• 30:56
  And then I stayed with them for a while, you know, in transitioning the business and all that.
• 31:02
  I created a family office. Actually, I created a family office before the sale,
• 31:06
  because I was already doing things like that. But I created a family office. I bought a hotel
• 31:10
  in Miami in 2019. I was investing, you know, looking at very busy. I mean, I'm looking at deals,
• 31:17
  investing in things. You know, I was never not busy. So I was doing that. I was on the board of,
• 31:23
  of another company, a financial company, then I actually did a SPAC. I did one of those.
• 31:30
  Those are popular for a minute. Those are probably for about three minutes. Yeah. And then,
• 31:34
  and I was on the board. And when Douglas Elliman became public in January of 22, I went on that
• 31:39
  board as well. And always doing, you know, entrepreneurial things, you know, within that time.
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• 34:30
  Before we sort of move into the second part of your career, how was you going to call it?
• 34:35
  Obviously, you can talk about a million different ideas or insights that you learned
• 34:40
  growing and scaling and exiting. I mean, you've touched every single part of a business
• 34:45
  that you can't. What would be some of the most useful ideas or insights that you've gained
• 34:51
  over your life being an operator, being an entrepreneur? Think about getting started. It could be
• 34:57
  when you're negotiating an exit. There's a lot there. So I don't want to go into everything.
• 35:00
  But some things that really stand out to you that are maybe not like the most vanilla ideas
• 35:06
  about entrepreneurship, things that are sort of unique. Yeah. I mean, I think there's so many things
• 35:12
  you have to do right. And I also think that, you know, I don't want to say luck. I don't want to
• 35:18
  use that word. But there is a level of karma that you've got to have. And that usually is a result
• 35:24
  of all of the hard work that you're putting in. You know, the luckier, you know, the hard work,
• 35:29
  the luckier I get is true. And there's a lot more to that simple little cliche. But I think that
• 35:35
  and the other thing I would say is you've got to be around the right people. It's so important
• 35:40
  in every aspect of your life, in your being your personal life and your business life,
• 35:45
  the people that are on your team. And I never say someone that works for me. I would say with,
• 35:49
  it's a team effort, right? Every aspect of it. There were people along the way that, you know,
• 35:55
  I said earlier in, you know, we're talking is that somebody said this or that to me. And I really
• 36:00
  remembered it. And it really stuck to me. There's all of that. And you've got to do business the
• 36:06
  right way. You've got to be honest in every aspect of your life. Because if it's a stranger,
• 36:13
  who are they? You have to lie to, right? If it's something you care about, you're just going to
• 36:16
  ruin it with a lie, if you lie. So being straightforward, being honest, being direct, working really
• 36:22
  hard, making sure that people around you are good, your lawyers are good, your accounts are good,
• 36:30
  the people on your team, the people you're bringing in. And the other thing I would say is,
• 36:34
  you have to be a motivator. You have to make people want to be on your team. You know,
• 36:41
  you've got to be the leader that people want to follow, you know, because you can't do it alone.
• 36:45
  And the one of the biggest, I was in a thing when I earned my early 20s called YEO.
• 36:50
  We had a YEO. Yeah, which is why we used to have all these things. And they gave me this book
• 36:54
  in why you're called the e-meth. And you know, it kind of talks about entrepreneurialism and
• 37:00
  scaling, being able to scale businesses and how you do it. And listen, I scaled an insurance
• 37:06
  consulting business. It doesn't get much harder than trying to scale it insurance because
• 37:11
  something is because our competitors in that space were companies with five or eight employees.
• 37:16
  And we had a hundred and ultimately you're 130, 140, and 50 if you get the final number.
• 37:21
  But it's very hard to scale professional services businesses, right? Because it's so people
• 37:26
  oriented, you know, and you got to manage the margins. You got to manage what the product that
• 37:31
  the people are putting out, which is themselves, right? You have to have your training. You've got to
• 37:36
  have quality control. I mean, there's so much that goes into, you know, like, that's where like,
• 37:42
  sometimes is the entrepreneur is the operator. There's the business getter, right? There are
• 37:47
  multiple things you have to be to be an entrepreneur. And it's very unusual to see an entrepreneur
• 37:53
  that's an operator, right? The entrepreneur is usually the idea guy, the business guy, the
• 37:57
  rainmaker or girl or person, right? And I had a lot of women in my businesses. So, you know,
• 38:01
  when I say guy, I'm the opposite of that. How do you define? And actually, that's a really
• 38:05
  good point, though, because I've always defined operator as somebody who actually builds the business.
• 38:10
  I really know. How do you define? It's not. If you really think about it, right? Someone's
• 38:14
  got to come out with the idea. Someone's got to be the guy or the girl that says, oh, this is the
• 38:19
  business we're going to go into. This is what we're going to create. They've got to be that visionary,
• 38:24
  right? That is usually the, you know, the insane person, right? That's got all the ideas and
• 38:30
  then whatever. Then you get down to the operator. You got to hire people. You got to deal with the
• 38:34
  HR of them, right? You got to know who the right people are to put in what positions. Then you got
• 38:39
  to get your financials right, right? So operations is a whole other animal than creating what you're
• 38:46
  going to be doing. And it's very rare to find the entrepreneur that also can be the operator.
• 38:52
  Very rare. What happened to somebody's too visionary, though? I know I can get away in a big way
• 38:57
  because a lot of times, yeah, a lot of times in a realistic, right? And a lot of a lot of visions
• 39:02
  don't translate into as like I said, I have a family office. I've been investing in things for
• 39:06
  30 years, okay? People have brought me so many business plans. I get so much unbelievable vision.
• 39:11
  And then I asked the question, well, how does this make money? How does this tie into a real business
• 39:16
  plan? You know, I see so many deals that people go and they raise money and people buy into that
• 39:22
  person's vision because they're very believable. But unless you look at the other side of that and
• 39:26
  say, all right, well, how is this going to make money? That's a whole other story. And I will tell
• 39:32
  you the majority don't make money, okay? 90% of the deals you look at never make any money.
• 39:39
  And you got to be the no guy. You got to say no over and over and over again and be brave enough
• 39:46
  to say no, not buy into that vision. And the other thing I would say is the one of the most important
• 39:52
  things in business, whether you're an entrepreneur, whether you're an operator or anything is
• 39:56
  discipline. You have to be disciplined. Most people do deals because they want to do a deal.
• 40:02
  They get emotionally into it. They want to, yeah, we're going to do this. It's going to be
• 40:05
  great. It's going to be this. It's going to be that they don't look at the reality. Everything I
• 40:09
  always look at, I always want to know what my downside is first. Always. Okay, what are this?
• 40:13
  I want to know the downside. I'm more responsible. What's the downside? Don't tell me about all
• 40:18
  of the things, right? Because in all the things, you also have to execute, right? Think of how many
• 40:22
  things go into creating something that's successful, how hard it is. No, very hard. Well, that's why,
• 40:28
  I mean, so when your family office, I'm assuming your family office does like early stage,
• 40:33
  you're not doing like, no, no, we'll give you an example. We were just looking at a business
• 40:36
  that's been around for 30 years. It's an operating business. It makes a machine. Okay. And one of my
• 40:42
  big questions to look at the guy that's evaluating it is this, well, what happens if someone
• 40:46
  events something that makes this machine obsolete? We're one trick pony business, right? So there's
• 40:51
  like so many things you have to look at. And then listen, there's analysis paralysis. You don't
• 40:56
  want to overdo it too. And you're in business to take risk. So there's like, well, this is the thing,
• 41:01
  right? So one thing that I find interesting is when somebody's been a great entrepreneur and they
• 41:05
  built the business and it's been acquired and then they have a whole bunch of money that they're
• 41:08
  sitting on. They make a lot of investing mistakes because a good entrepreneur doesn't always mean
• 41:14
  a good investor. And now you've been doing it for 30 years. You're not new to this. But for
• 41:18
  somebody that looks at businesses, I think there's lessons in this for an entrepreneur who's
• 41:22
  building and also investors looking at putting their money into the right business and betting
• 41:26
  on the right person. What should an entrepreneur be thinking about? What should an investor be looking
• 41:33
  for that you've seen sort of is a good signal for success? Well, the number one thing is the person
• 41:40
  you're betting on. Everything is a jockey bet. Everything, right? I mean, you better know that the
• 41:46
  person that you are as leading that business has the attributes that I mentioned, right? They're
• 41:52
  entrepreneurial. They've got a great idea. It's incredible. They know how to execute it. And if they
• 41:56
  don't know how to execute, that's okay. But higher people that can execute, right? Make sure you put
• 42:02
  the right team in place that's going to do it. And you want to meet that team. But it's all a
• 42:07
  jockey bet. Like when, when meta, right, was falling apart and the stock went from your member
• 42:13
  from $388, I bought more. I bought more for one reason. I'm going to, I think Mark Zuckerberg is
• 42:19
  an absolutely brilliant genius. It was a jockey bet for me. And the fact that he changed the company's
• 42:23
  name from Facebook to meta at the top. He was at the top. And he thought he needed to change the name
• 42:32
  to bring that business into the future. How many entrepreneurs or CEOs of a company that are at
• 42:38
  the top have a trillion dollar business and feel the need to change the name of the company
• 42:45
  to bring it into the next century, as you would call it. And I said to myself, wow, to me,
• 42:51
  that told me everything about what that guy's thinking. And it told me is he's not going anywhere.
• 42:56
  Right? That's another guy that like he's a CEO. He created this is his whole life. He's not
• 43:00
  going anywhere because if he's out of there, I don't want to own that stock. Okay. And so at the end
• 43:05
  of the day, when I look at businesses, I'm always looking at this. Who's the CEO that's running that
• 43:10
  company? That's the bet you're making. That's where you see some businesses where somebody takes
• 43:15
  over this decrepit thing that's going on and they turn it into the most unbelievable business that
• 43:21
  they could, you know, turn it into. And that's the only thing you're betting on in my opinion. There's
• 43:25
  a lot more obviously, but that's the number one criteria for me is who's the CEO?
• 43:33
  You know, it's interesting because you again, you mentioned like the 5E button sold this business
• 43:37
  multiple times. I've seen many times where you have this and to sort of further your point,
• 43:43
  there's always an incredible founder CEO that builds a business and then it's sold the private equity
• 43:48
  or it's sold to a strategic buyer and then it goes to shit. And it's because of the person
• 43:53
  isn't there anymore. Well, I sold the business to private equity. Okay. Before I sold it the last
• 43:58
  time. Okay. So I tell you about that business. I bought it. I sold it back. I sold it in 2016
• 44:03
  to private equity and then me and a private equity firm sold it again. Okay. The private equity funnel
• 44:08
  I'll name them because they're great is a stone point capital and they always understood
• 44:15
  that they couldn't run the business. They understood from the beginning who the guy is or
• 44:20
  a girl is that's running that business. Okay. And that's it. And when we got an offer to sell it,
• 44:27
  they said, we'll own this business with you forever. We don't care. Okay. But if you want to sell it,
• 44:32
  we'll sell it to. And again, it's the same thing. So you have private equity. You have people that
• 44:38
  you know, companies have five businesses and they're really smart and not just giving these other
• 44:43
  example. When I sold that business, I had another offer for it that was more. I chose to sell it to
• 44:48
  those guys because they've been around the block 500 times. I knew they would make me more money on
• 44:54
  the second hit and they were going to let me run that business how it needed to be run. Right.
• 45:00
  And that's the other thing again, they were making a jockey bet. It's like, who's, you know,
• 45:04
  listen, after the settlement, I got calls from, you know, other private equity funds that I did
• 45:10
  business with in the past and everyone of them called me and said, Hey, is there anything for us to
• 45:15
  do with you here? They were making the jockey bet about me. It was the same thing. Right. That's
• 45:20
  all what it's about. There's other things you have to diligence to, but the number one thing.
• 45:25
  Again, I had a thing on my family office website. I don't think we have that website up anymore,
• 45:28
  but it was a quote that I had and it said, you can't do a good deal with a bad guy and you can't
• 45:34
  do a bad deal with a good guy. It's the truth. It's the truth. And you know, why you can't do a bad
• 45:41
  deal with a good guy because ultimately businesses goes up down. It's dynamic. It's this and that.
• 45:46
  If you're doing it with the right person, you'll figure it out. You'll figure it out. You'll adapt.
• 45:51
  As an investor, you just have to figure out that right person, the one founder, the one CEO,
• 45:57
  that's really the person you're, your team or team. But the question or the point is,
• 46:02
  how do you take that idea and translate it into running a whole company? So how do you take
• 46:07
  that idea of finding that right person and then you just deploy that against the whole company,
• 46:11
  so that you always attract the right people? Well, there's always stages of everything, right?
• 46:16
  So it's not all coming. You're not going to come up with it all day one. It's not going to be like,
• 46:20
  all right, we're going to put out this blueprint. I got this great CEO. I've got this great CFO.
• 46:25
  I've got this great product. And here you go. Here's the plan for the future. I've been a Douglas
• 46:29
  element for nine weeks. My business plan has changed 15 times. It may be different next week.
• 46:37
  What I mean by that is that I keep learning new things. I keep meeting new people. I keep running
• 46:43
  across different things within the company. And I adapt to it. And if I said something to somebody
• 46:49
  two weeks ago, and now I change it, and they call me up and say, but you said this, I don't really
• 46:54
  care. Okay. I'm going to do which right at the moment that is there. And if you're not a CEO that
• 47:01
  doesn't know how to adapt to current events, you're the wrong CEO and you're running the business
• 47:06
  with your ego, because the only person that won't change is a person that's ego is in the way.
• 47:11
  Right. So for us at Douglas element, our business plan may be a little bit different. It may be
• 47:18
  a little varnished a little or maybe a little polished or it may be adjusted in another month or
• 47:23
  two months. Right now we're coming up with plans. Obviously we have plans. We think about plans
• 47:28
  every day. We have a team that we think about what we want to do with the business. And I think
• 47:32
  generally we have a generalized blueprint of what we want to look like. But within that blueprint,
• 47:38
  things may change. Some people may change. Some business plans. Maybe somebody brings us an
• 47:43
  unbelievable idea that we say, you know what? Wow. We haven't seen that before. I'm not passing on
• 47:49
  that idea. I want to maybe I want to implement that. We are a piece of technology that I think
• 47:55
  is transforming to our business. And now we need to basically, you know, turn the wheel a little
• 48:00
  bit to the left. That's what we're going to do. And we're going to be dynamic. And you know,
• 48:04
  the business that I sold that we talked about, it felt like a new business the day I sold it.
• 48:09
  Because we were always innovating. We were always doing new things. And Douglas element is going
• 48:14
  to be an entrepreneurial, mean, lean, innovative, winner attitude, business. That's going to be
• 48:26
  dynamic. Okay. And do really interesting things. Be on the forefront of our marquee real estate
• 48:33
  business with a name that is the best in the business. And we have an amazing opportunity here.
• 48:38
  And again, we may look a little different than everybody else in 12 months or two years.
• 48:46
  And we're excited about that. No, I think that first of all, I think that you have the right.
• 48:53
  I think the best CEOs are entrepreneurs. I truly do believe that. I don't think that you can
• 48:57
  air drop an MBA and be as good as CEO. I mean, I'm sure there's some great CEOs that do have the
• 49:05
  Ivy League education, but I think that entrepreneurs just how fast they think and how comfortable they
• 49:11
  are with radical ideas. I think that's more and more where you're going to have to see in that
• 49:15
  C-suite because technology changes so fast, world changes so fast, you can't just be comfortable
• 49:21
  with an idea and set it and forget it. I don't think business exists like that anymore.
• 49:25
  Well, it's interesting. So I met with an engineering, coding, technology developer a couple of
• 49:33
  weeks ago and we started talking about building a piece of technology for us. I did that before.
• 49:39
  One of my insurance businesses, we built technology. They told me it would take six to nine months
• 49:43
  to build. It took two and a half years. It ended up being great technology, but the insurance
• 49:49
  business is a different business in residential real estate. And the problem with building our
• 49:53
  own right now is by the time we finish building our own and conceptualize it and beta test it,
• 49:59
  it's probably going to be obsolete. And today, there are so many companies out there building technology
• 50:06
  for residential real estate. We don't need to build it. We don't need to. And it really goes along
• 50:12
  the lines of what you're saying, right, is that you want to build and you want to do all these
• 50:17
  things, but the market is moving so fast that, you know, and listen, we have competitors that
• 50:23
  want to have built expensive fortune and money building technology. And we see their technology.
• 50:28
  It's fine. It's not groundbreaking anymore. It may have been groundbreaking two years ago when
• 50:33
  they released it. There's nothing groundbreaking about it. You could buy it off the shelf today.
• 50:37
  So you know, like you said, things move so quickly. If you're not willing to adapt as a CEO
• 50:43
  in business in real time, forget it. And when you do, when you do make those acquisitions,
• 50:49
  you have to make that you give that acquired company the air to breeze. You don't just
• 50:54
  stifle the innovation that made them who they are to because I see that happen a lot as well.
• 50:58
  You acquire a company and then all of a sudden just corporate bullshit just destroys that
• 51:02
  entrepreneurial innovation that made that company so great. Most of the time, when you see
• 51:08
  acquisitions and you know, at that company, I was with NFP while I was there, we did 400 acquisitions.
• 51:13
  So you see every bit. And again, it gets back to who you buy, who is that person? Because
• 51:18
  you don't want to buy a business and the people that built it created a great leaf. Yeah,
• 51:23
  of course. We don't want to buy a business because we're buying a people business unless we buy
• 51:29
  a product. So you want to make sure that those people that you're buying are going to stay
• 51:34
  and are motivated. And like you said, let's Douglas Elman has bought other brokerages that were
• 51:38
  profitable before we bought them. And now they're not. Well, what went wrong there? Did you buy
• 51:44
  the wrong entrepreneur? Did we put too much bureaucracy on them? You know, did we not innovate?
• 51:50
  So for us, if we're going to look at an acquisition, it's going to be an accretor from day one.
• 51:55
  It's going to add value from both businesses, right? So let's say we pay a five multiple for
• 52:00
  something, right? We want our effective multiple post closing to be a two or three, right? Because
• 52:05
  they're operating efficiencies. We have the platform. Maybe they don't or maybe we've got redundancy
• 52:11
  someplace and we're going to fold them in and eliminate the redundancy. So like, you know,
• 52:16
  those mathematical decisions. And then again, you have the people aspect of it too. And that's why
• 52:21
  it's also important to take your time. Don't find a deal like this is the greatest thing and rush
• 52:26
  to close it because the diligence period is an incredible period of time to find out about the
• 52:33
  people that you're dealing with. People show themselves, right? So go through that. It's like the
• 52:37
  interview process. Don't do one. I heard one person in my life on the spot, okay?
• 52:42
  Went in my insurance business and just so you know, she was one of the best people I ever hired,
• 52:46
  okay? But that was lucky. I think that was very lucky. That was lucky. My process after that is
• 52:51
  like a five, six, seven, eight, nine or 10, you know, period of time, you know, to hire because
• 52:58
  you learn a lot in that process. So let's talk about let's talk about you stepping into CEO
• 53:04
  position of Douglas element. So you were on the board first and what made you the jockey
• 53:10
  that the board wanted to bet on? It was an interesting scenario because I was around the company even
• 53:15
  before. I had only insurance business with them many years ago that we bought that I bought and
• 53:20
  they got a piece of the business and then we sold it. I knew the management team pretty well for a
• 53:26
  long time. Then when we were public, I was on the board. You know, I said a lot when I was on the
• 53:31
  board, I always had kind of, you know, my ideas of what I think we shouldn't be doing or we shouldn't
• 53:36
  be doing something. So I listened to something. So I didn't get listened to. I knew a lot of the people
• 53:42
  there. We also had the unique scenario of a CEO that was very involved and a very dynamic person
• 53:49
  in that business, you know, for a long time. And you know, he was a guy that we knew was a board.
• 53:55
  You know, he was seven, he's 76 years old. You don't sit on the board of a public company
• 54:00
  with a CEO there and not be talking about the session. So we were talking about the session
• 54:05
  for a long time. We actually had one board and then we had a bunch of people that got off the board
• 54:08
  and then some came on. So we had some new board members, you know, as well. But it was just a very
• 54:16
  difficult position to fill for us. We're how we decided that, you know, he was, you know, finished
• 54:21
  being the CEO. It was very difficult for us to, you know, I think we brought in a regular industry
• 54:26
  player. I don't think that was right. I think we needed a fresh set of eyes on it. I think
• 54:31
  everybody thought that I knew a lot of people in the business. I was at a unique slice of time
• 54:36
  in my life that I actually wasn't doing something full time. So to speak. So I just think that the moment
• 54:44
  at that point was right. And I think, you know, when it got brought to me that one of the other
• 54:50
  board members said to me, you should do it. You know, I kind of shook my head a little bit and then
• 54:55
  we kind of all, you know, talked about it and that's what happened. Yeah. Was it an easy transition?
• 55:00
  Was it messy? What was it like? Well, um, anytime you go into a brokerage business that is so,
• 55:08
  you know, we've got close to 7,000 real estate agents that all, you know, a lot of them think they're
• 55:12
  the CEO of the company too, right? They all want to have a big voice. They're all entrepreneurial.
• 55:18
  They're very aggressive, you know, in a good way. That's actually a difference from other
• 55:22
  companies, right? Because if you walk into a CEO position of a non-fessional service or non-brokers
• 55:27
  business, then the employees, they don't think they're the CEO. Is that they could do? You want to
• 55:32
  keep your job. You're not going to say a word. You're going to call that new CEO and be like,
• 55:35
  oh, is there anything I could do for you? You know, how can I help? Right? This was like, am I staying?
• 55:41
  Am I going? Why should I be here? What are you going to do for me now? I never thought about that,
• 55:45
  but that's that brutal. You have no idea. Okay. Listen, we have like 800 employees. Okay.
• 55:51
  An incredible people. We have some incredible people that work at Dr. Solomon. Really
• 55:54
  incredible. But the agents are like, all right, well, why should I stay here now? I mean, I don't
• 56:00
  know you. I don't know where you come from. You're not in the real residential real estate brokerage.
• 56:05
  You know, so I went on a marathon of literally trying to speak to or see every single agent that we
• 56:13
  had. And they're really important people. But I will tell you 99.9 percent of the conversations
• 56:20
  that I had were positive. I wanted I wanted to conversations one or two out of thousands that were
• 56:28
  not enjoyable for me. The agents were amazing. Douglas Elliman has an unbelievable group of agents
• 56:36
  that are entrepreneurs that are hungry for change that are hungry to make money, hungry to grow.
• 56:44
  And I have met some amazing people. I can't even like imagine like that. You know, now I wouldn't
• 56:49
  like I would have never met these people. You know, so some of the relationships that I've developed
• 56:54
  over the last couple of months with them have been amazing. And the employees of the company
• 57:00
  are truly amazing as well. And we've got, you know, normally when you come into a business where
• 57:04
  you think, all right, who do I have to bring them from the outside? That's your normal thing.
• 57:08
  Not here. Here we've got enough resources on the bench. They just need the ability to have autonomy
• 57:15
  to be in an entrepreneurial, you know, prior management was older. They had a different way of
• 57:20
  thinking, you know, when all that listen, there's nothing wrong with older, right? There's,
• 57:23
  you know, you need experience and, you know, I'm not 30 either. Okay. So I'm not 28. Yeah, exactly.
• 57:30
  I'm not so young myself. But so we've got some great senior people. In fact, I elevated one of them,
• 57:35
  you know, that we elevated a guy that's, I think he's in the 60s. I think I don't even know. But,
• 57:40
  you know, so I think that we've got some great senior people. We've got some great, you know,
• 57:46
  youthful people. We've got a real mix and we like a real mix. We want everybody from all over the
• 57:51
  place, but really amazing. But it was, it's really a challenge and you go into become the CEO of a
• 57:57
  company and you've got independent agents that can lead tomorrow. I mean, there's nothing
• 58:02
  that holds them back. So what, what would make somebody want to stay? Because I don't come from a
• 58:07
  real estate world at all. I have no idea. I don't even understand how some people choose the brokerage
• 58:12
  that they, you know, they hang a license at. To me, it just seems like a, a crapshoot because I'm
• 58:16
  not in this space. So what makes somebody actually want to stay versus go? Well, listen, I think,
• 58:21
  I think the other thing is, you know, a lot of agents, I think, look to the company or the
• 58:24
  end of the day, it's about the agent, right? It's about who they are. They're building their own
• 58:28
  business. We have what they call teams as well, which is teams of agents actually create their own,
• 58:33
  they create their own brand. It's like a brokerage within a brokerage. But I think people believe
• 58:38
  number one in their brand. They think they've got a great brand that gives them the ability to sell
• 58:43
  more, gives them the notoriety of that brand. I think the resources, but I think ultimately it's
• 58:49
  the people. I think people want to work in an environment where they trust the management team.
• 58:54
  They like them. They think they're going to take the company to a good place.
• 58:59
  And I think that's one of the main reasons that people come or go at a brokerage. And I think
• 59:04
  there's a lot the company can do. I think there's a lot I can do to give them the environment that
• 59:12
  makes them the most successful that they can be and want to be with us. And I think we are a really
• 59:18
  unique option for agents. I think our competitors are much different. I think if you want, I think
• 59:27
  people, if they understood what Douglas element is all about and our history and the people that we
• 59:34
  have, especially about some of the things we're going to be doing in the future, we're the option
• 59:39
  in my opinion. And I'm not saying that because I'm going to see, yo, I believe it. If I didn't believe
• 59:44
  it, I wouldn't be. I get outing another reason why. You know, no, I get it. When you walk into
• 59:51
  so real estate, all I know is that it's an old industry. It's been around for forever. I'm sure
• 59:56
  there's a lot of legacy best practices that may not even serve people as well as they used to.
• 1:00:03
  And when you're alluding to sort of innovation and change and you're going to do things differently,
• 1:00:07
  you're going to be the name in the space. So what are some of the, you know, the quote unquote sacred
• 1:00:12
  cows that you have to, you have to kill right away that you think don't serve agents, don't serve
• 1:00:18
  the actual buyers or sellers. Like what is outdated? What is legacy? What doesn't, you shouldn't
• 1:00:24
  exist anymore? Yeah, I think that's a great question in the sense because the residents of
• 1:00:29
  real estate brokerage in general is becoming somewhat outdated, right? And it's a changing
• 1:00:39
  business, right? You have the commission structures are changing, the competitive landscape of
• 1:00:43
  the business is changing. But then at the same time, the traditional business will stay, right? You
• 1:00:51
  can't go see a home with a robot, right? The robot's not going to negotiate the deal for you or tell
• 1:00:57
  you, you know, about your neighbors or about the school systems. And I mean, listen, you could pull
• 1:01:02
  that a lot of that data on your own today and all that. You could do your own research and all that.
• 1:01:06
  But there's a lot of things we all can do as people, but we still hire people to do it, of course,
• 1:01:10
  right? And it is a emotional decision too. Yeah, and we're busy. We don't have time to do
• 1:01:14
  everything and, you know, all of that. So I think that, you know, ultimately, you know, this business
• 1:01:20
  is changing. When you talk about sacred cows, we don't have any sacred cows. We are a non-discriminating
• 1:01:30
  business that is there to make it better. So there is no one, I'm not, this is another,
• 1:01:35
  where's another advantage? I think of me becoming the CEO is that I don't have any legacy
• 1:01:41
  relationships that I need to protect. I don't have any legacy projects that, you know, I,
• 1:01:47
  you know, bet the ranch on that I need to make sure I work or else I look stupid, right? I have
• 1:01:53
  none of that. I only want what's best for the company, what's going to make us a better business,
• 1:01:58
  what's going to make us a more profitable business. That's all I care about. And my ego is
• 1:02:03
  checked at the door. I don't need to be on TV. I don't need to, you know, you know, do any of it.
• 1:02:10
  I just want to basically make sure that we build a company that's going to, you know, last for
• 1:02:15
  the next 100 years, like we last said for the last 100. So there's nothing, there's no sacred cows
• 1:02:21
  here. So then look outside. There's going to be brokerages that aren't going to survive.
• 1:02:26
  Why do you think some brokerages won't survive? You know, the name names obviously, but in terms of
• 1:02:30
  practices, why do you think they won't survive? I think someone survived because the financial
• 1:02:34
  condition, because of some of the conditions that some of the decisions that they made have not been
• 1:02:38
  that smart and they put themselves under the gun, right? The most important thing is making sure
• 1:02:43
  you have your capital reserves because you're going to have ups and downs in cycles. And if you can
• 1:02:48
  survive those cycles within those negative cycles are the times you should be the most opportunistic.
• 1:02:53
  But if your financials are not in order, you can't do that. Okay. So that's one of the reasons some
• 1:02:58
  of them won't survive. I think some of them are chasing business models for the wrong reasons.
• 1:03:04
  And they're not focused on profitability. They're focused on revenue revenue revenue. Well,
• 1:03:09
  that's great. But at some point, it has to be earnings earnings earnings, right? So I think that,
• 1:03:15
  you know, and there's a lot of people in this business, as an individual, I know there's a lot of
• 1:03:21
  them. Yeah. But, you know, when you get to the bigger ones like us, there's not a lot of them.
• 1:03:26
  And I think I would not be running those businesses the way some of the people, I'm not going to
• 1:03:31
  obviously mean, you know, are running them. And I'm trying to run this one much different than
• 1:03:37
  it's been running the past. And I want to run it different in the future. And I think there's
• 1:03:42
  a lot of things that we can do to bring this business into the future that I don't think of that
• 1:03:47
  hard, which is, you know, we just have to have our plans, you know, the right way and do an
• 1:03:52
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  on the show. I really appreciate it. How other brokerages grow. I'm assuming they just trying to
• 1:07:35
  track as many agents as possible. Is that is that like a pretty standard from what I was always a guy
• 1:07:41
  that never really paid much attention to his competitors. But I don't know anything about real
• 1:07:44
  estate. I'm trying to figure out. I'm trying to figure out the most, you know, illuminating questions
• 1:07:50
  to ask a bite. No, I think you're asking the right question. I think what's interesting about it
• 1:07:55
  is that I think that a lot of the residential real estate brokers are following the playbook. Let's
• 1:08:03
  just hire as many agents as we can. And that's what our competitors are actually doing. We don't want
• 1:08:09
  to do that. Number one, we don't want to create a crowded train. Okay, we don't want to be where,
• 1:08:16
  you know, you're holding onto the, you know, onto the pole, you know, and you've got a person's
• 1:08:21
  nose, you know, half an inch away from you. We don't want to be the crowded train. We want to be
• 1:08:26
  the luxury brand with quality agents. And we want the right agents. And we're going to be selective
• 1:08:36
  on the agents that we hire. And we're not going to hire every agent for because we think that we
• 1:08:41
  can make a ton of money on them. Yeah, we want to make money. Of course, we're in the business of
• 1:08:44
  making it on the business of churning and burning. We're not in the business correct. We're not in
• 1:08:47
  the business of churning and burning. We're not in the business of, you know, we want an honorable
• 1:08:53
  play nice in the sandbox. We want agents that can be collaborative with one another,
• 1:08:57
  where everybody wins. They don't have to worry about being stabbed in the back. And I only say that
• 1:09:02
  because listen, it's not me, Michael Leeboots didn't invent this stuff. Okay. The residential
• 1:09:07
  real estate business, like every business, not just residential real estate, have, you know,
• 1:09:11
  people that aren't so honest and all that. And listen, you're a big company. You're always going
• 1:09:15
  to have that issue. But I think what we want to do is really target the right agents and the right
• 1:09:20
  places that are going to do business in a way that you want them on your team and not just hire
• 1:09:26
  anybody for the sake of it, which is what our competitors are doing. And when you get, I mean,
• 1:09:30
  that's a bad experience for the agent. That's a bad experience for the buyer and the seller when
• 1:09:35
  you just have a massive amount of people because it's your brand. You're also going to ruin your
• 1:09:39
  brand. If you have some bad person out there, you know, carrying around your business card,
• 1:09:44
  I don't want that. And if we'll make, if we have to be a little smaller, for that for now,
• 1:09:49
  like one of our models internally is shrink to grow. I like that. Yeah. No, I mean, quality,
• 1:09:54
  quality wins. I mean, if you think about from my world, it's, it's product led marketing and
• 1:09:59
  product led growth. And what's the center of that? It's having a good product. If you don't have
• 1:10:03
  a good product, yeah, you can market it and you can, you know, push it out to the masses. But if
• 1:10:07
  people, it's just going to let people discover a shitty product with her, right? You have to have
• 1:10:12
  that good product. And in real estate, agents are the product without sounding like crass. But they're
• 1:10:19
  the thing that makes the business grow. So if you just accept anybody and everybody,
• 1:10:25
  then you have a bad customer experience. Correct. Yeah. What, I mean, there's been a lot in real
• 1:10:30
  estate. I would actually lean on you to sort of educate me as to some of the things that have happened
• 1:10:36
  with like commission structures and things like that. And there was obviously the, there was a massive
• 1:10:42
  amount of legal and lawsuits around commission structures. And that was earlier this year.
• 1:10:49
  For people that are listening that are in tune with that, which would probably be agents.
• 1:10:54
  What, what are some like insights or words of wisdom around whatever was the outcome of that?
• 1:11:00
  Like, how should that affect how an agent does their job or how they interact with buyers and
• 1:11:04
  sellers? Yeah. I mean, it hasn't had as big of an impact on the industry as one would think.
• 1:11:10
  I mean, there's some paperwork, obviously, which is nobody wants more paperwork, right? So it's
• 1:11:14
  created, you know, some more paperwork. I think it also is creating a little bit more, you know,
• 1:11:22
  the buyers and the sellers kind of know where they are a little bit more in terms of who's paying
• 1:11:26
  the commission, you know, and who's getting the commission and how is that being broken up?
• 1:11:31
  I think that's probably going to create a good thing for the industry ultimately, where you'll
• 1:11:35
  have people that are much more professional. I think it makes it a more professional transaction.
• 1:11:41
  But you got to roll with it. I mean, that's the environment we're in. You have to adapt to it,
• 1:11:47
  and we'll adapt to it. And we're all adapting to it. It hasn't thrown the business into,
• 1:11:52
  we have a lot of other issues that we think are much more important than we need to deal with.
• 1:11:57
  Believe it or not, it wasn't it was like the not, it was like the none of your, yeah, yeah,
• 1:12:01
  it was a lot sooner than you are. And you know, the lawyers, they got, they made a lot of money.
• 1:12:04
  You know, we'll, we'll, we'll always do make a lot of money. Yeah. We will pay a lot of settlements.
• 1:12:09
  You know, you've got some, you know, again, additional paperwork you have to do in terms of
• 1:12:13
  disclosure. And we do that. But there's a lot more things that in the residential real estate
• 1:12:19
  business going on than just that. Okay. Yeah. Gotcha. What is keeping your agents up at night then?
• 1:12:26
  Listen, I think, you know, when you're, I was always a guy that, you know, I always owned the
• 1:12:30
  business, right? So I always worked on commission. I always got a piece of the, of the revenue.
• 1:12:35
  I never got a salary. So I think for agents, you know, they don't know where the next dollar's
• 1:12:40
  coming from, right? But that's always been the case. It doesn't, it doesn't, but it never gets
• 1:12:44
  easier. I'm gonna give, I'll give you an example. Okay. Obviously, you know, I've obviously made a
• 1:12:49
  lot of money. Okay. But I spend much less as a person than I really could. Okay. My kids actually
• 1:12:57
  push me to spend more money. They don't think I enjoy myself enough. But I think what it comes
• 1:13:01
  from is that I never knew where my next meal was coming from. So to speak, even though I made
• 1:13:06
  money early, right? I was really young. But I still have the mentality that I need to have
• 1:13:12
  X amount because, you know, this is, you know, this is actually the first time I've ever got a salary,
• 1:13:17
  by the way, really like a technical salary. So I, and so I really relate to the agents, really,
• 1:13:24
  you know, how they think and they don't know where their next commission's coming from. It's
• 1:13:29
  their business, you know, they don't, you know, they're not on a salary. They buy their own health
• 1:13:33
  insurance. They have all of that. And I think what keeps them up at night is the traditional
• 1:13:38
  things of, how am I going to get the next listening? Is this deal going to close? You know,
• 1:13:43
  I think those are the typical things. In 2324, we're very difficult years, you know, in residential
• 1:13:49
  real estate. I think 25 is going to be a much better year. So, and I think we're going to, as a company,
• 1:13:54
  for, for my agents at Douglas element, we really want to be supportive, helpful, entrepreneurial
• 1:14:02
  with them, you know, do everything we can to get their commissions up through everything that we
• 1:14:06
  can do for them. And, you know, we really want to be a partner and be really helpful to them,
• 1:14:14
  because we're really all in it together. And you know, a lot of, you know, companies will say,
• 1:14:18
  oh, the agent splits or whatever, we don't make money on wherever, BS. Okay, we make what we make
• 1:14:23
  on these, on the agents, they make, they get what they get from us. This is the nature of the deal.
• 1:14:28
  We all need to accept it and be one plus one is five, right? This is the reality we're in. Okay,
• 1:14:33
  whatever the commission structures are today, other companies and managements may not like it.
• 1:14:39
  It's what it is. So, let's figure out a way to coexist in an environment, thrive, right? And,
• 1:14:45
  and grow our numbers. The greatest way to get along and be happy together is make all the numbers
• 1:14:51
  go up. You'll get a bigger, more dollars on your bigger percentage. We'll get the dollars on
• 1:14:56
  whatever percentage we get and we'll all win. And that's how you got to think about it.
• 1:15:01
  Do you have advice for agents? Because again, like that paycheck to paycheck, it's very stressful.
• 1:15:05
  Do you have advice for agents just in terms of how they operate so they don't have to do with that
• 1:15:10
  as much? Don't overspend. Okay. If you're looking at a $3 million house and you can afford three,
• 1:15:16
  don't spend five. Okay. I tell it to my kids all the time too. Okay. That's good.
• 1:15:21
  Live within your means because it makes you again, I was never like an overspender. So,
• 1:15:26
  I always had capital. And that's what made me a much stronger player, right? But listen,
• 1:15:32
  there are other people giving you this the opposite analogy, right? Someone like me would say,
• 1:15:36
  oh, spend and go crazy. Why? If you tell them to do that, they'll keep working even harder and
• 1:15:41
  harder and harder and they'll make more commissions and more commissions. Okay. This is true to that.
• 1:15:45
  But I would rather be a little bit more caring and tell someone, you know, that like,
• 1:15:50
  try and live within a reasonable, you know, have fun and enjoy yourself. You only live once.
• 1:15:54
  I'm all for that. Don't get me wrong. But also when you're running your own business,
• 1:15:58
  it's very important to know that you got a rainy day fund for yourself, huh? If it's slow.
• 1:16:04
  You know, 100% and listen, you also, you know, tell somebody just like
• 1:16:09
  spend everything they've ever made, you know, buy the buy the $5 million home, go on the vacations,
• 1:16:15
  whatever. There's a point where they can burn out. They're no good anymore.
• 1:16:20
  And it's mentally draining, of course. Yeah, mentally drained. What keeps you up at night?
• 1:16:26
  Not the agent keeps you up. Nothing. I love it. Nothing. I have to tell you nothing. I don't,
• 1:16:34
  I don't wake up in the middle of the night worried about what's going on at Douglas
• 1:16:39
  Element. I actually go to sleep. I've really kind of always been that way. It's funny. My son said
• 1:16:43
  this to me yesterday about something. I don't remember. I forget what it was. I wasn't feeling that,
• 1:16:49
  like, you know, from all this flying oil, I had a cold. It like wasn't going away or whatever
• 1:16:52
  as I'm exactly right. Yeah, everybody's been, you know, shaking up hands, you know, to catch
• 1:16:56
  something, right? I literally not joking. When I go to sleep, I can't wait to wake up in the
• 1:17:01
  morning. I can not wait. My favorite part of the day is putting CNBC on at 5.36 AM. I have coffee
• 1:17:09
  the minute I get up like literally I walk straight to the coffee machine and I cannot. I am so
• 1:17:14
  excited to wake up. There is nothing that keeps me up at night because you can deal with everything.
• 1:17:22
  I'm going to be less effective if I'm worried about it and if I'm nervous about it and you know
• 1:17:26
  what, if you have your health and everything else is going well there and your family's pretty healthy,
• 1:17:32
  everything else you could deal with. Okay. So maybe we have some financial thing we need to deal with
• 1:17:37
  maybe we have some crazy agent that's screaming at another one. Okay, you deal with it. I mean,
• 1:17:42
  nothing really keeps me up. I'm going to be honest. I love. I mean, that's that's the way you have
• 1:17:47
  to operate from because then your decision making framework is just healthier. I think that when
• 1:17:52
  you operate from place of stress and anxiety, I think that decisions you make are just horrible.
• 1:17:56
  Yeah. And I'm always thinking about offense. I'm always thinking about all right, what can we do
• 1:18:00
  to grow? It's like, what can we, what are we doing tomorrow that makes it bigger? Are we going to
• 1:18:04
  hire this agent? Are we going to get that? Are we going to get this new development deal?
• 1:18:07
  Today, I had a two-hour meeting with a bunch of great developers. I have three, I can't talk about
• 1:18:12
  what they are, who they are, but three unbelievable projects that I love. I'm not saying it because
• 1:18:18
  we're going to get the projects. I think they're amazing. So like, that's what makes me excited.
• 1:18:23
  You know, we have our holiday part tonight. I'm excited. I can't wait to go. Same thing.
• 1:18:27
  If you thought about a piece of of your life, you were just a pure entrepreneur. Now you step
• 1:18:33
  into like, you know, see sweet roles. What would be some things that you carry over from entrepreneurship?
• 1:18:39
  What are some things that definitely don't translate? I carry it all over. All of it. I'm not joking.
• 1:18:44
  I literally apply every single thing that I learned as an entrepreneur and in my other businesses
• 1:18:53
  to what we're doing at Douglas Elements. The only difference at Douglas Elements is we get,
• 1:18:58
  I have so many people and resources that can help me. As an entrepreneur, it was like, I felt like
• 1:19:03
  I was doing it all myself. So this is easy, then. It's much easier. I have much more resources.
• 1:19:10
  The only thing is I'm also an operator at heart. So I also say to myself, do we need all these people?
• 1:19:16
  I mean, we have so many people and so many resources like, do we really need all this?
• 1:19:22
  So that's the evaluation process also that I'm going through now and saying to myself, you know,
• 1:19:28
  do we need X number of people in accounting? Do we need X number of people in this piece of the
• 1:19:32
  business or that piece of the business? So I think it all translate over. But again, it's interesting.
• 1:19:37
  Your question before is so interesting. What you asked me about, is it easier to come into a brand
• 1:19:42
  that's already established or a one that you started? And this is so much easier, so much easier.
• 1:19:48
  Then starting the business, that was hard. This is not, this isn't so hard. It's just because
• 1:19:56
  you have, you have so many resources. Obviously, you don't want to have bloat in the company either.
• 1:20:01
  How do you make that? This is a lesson for somebody that has built a company and they have,
• 1:20:07
  they have a whole bunch of resources, but they want to make sure they're still efficient.
• 1:20:11
  So how do you make sure that you are operationally efficient? What's your, how do you think through
• 1:20:16
  that problem? Well, you have to number one, look at what the problems are, right? So if people
• 1:20:24
  are complaining about, you know, this check didn't get paid or this, you know, AR is complaining
• 1:20:35
  about, we didn't, you know, someone's complaining, we didn't collect this dollar or we didn't pay
• 1:20:38
  this. Well, then your radar's got to go up there. Maybe I have an issue in the accounting department.
• 1:20:43
  Maybe my systems aren't up to snuff. Do we have the right people there who they're reporting to?
• 1:20:48
  And I get every day, right? I talk to agents every day. I promise you. By the way, that's
• 1:20:53
  the, that is, I mean, if you are CEO, you have to be talking to everybody. I'm talking to the ages.
• 1:20:58
  I get complaints about what's wrong. I get, I had one yesterday. I was on the phone with someone
• 1:21:01
  that said, I don't know, something happened with her check and went to the wrong address. And
• 1:21:07
  first thing I said there was, why are you still using checks? You know, can we wire to you? I mean,
• 1:21:13
  but again, that's where it gets down to, right? We had an agent that's still waiting to get a check
• 1:21:16
  in the mail. What does that tell me? That tells me that our systems maybe should be upgraded. Maybe
• 1:21:21
  we're using an antiquated system because it should be something where she could see the thing pop
• 1:21:25
  up on her phone, right? So that's, there's multiple failures there, right? You got, okay, go up to
• 1:21:31
  our head of accounting, go down to our IT people. Why is that not connected? Look at the environment
• 1:21:36
  we're in. That should be a click boom, boom, done. We shouldn't be talking about that right now.
• 1:21:41
  You know, there's a lot of that. There's in our marketing department, right? Some people in
• 1:21:45
  marketing feel that decisions aren't made at a local level, that everything gets made out of HQ,
• 1:21:51
  right? Well, there's some accountability to why that should happen. But then there's also the
• 1:21:56
  thing is that most things are local. So maybe we should have a hybrid kind of approval process in
• 1:22:02
  this. You know, so there's a lot of things. And so for me, I'm a very good listener. Okay, I'd
• 1:22:08
  listen to it all. I hear it all. And when I talk to people every day and people mention things that
• 1:22:13
  are going on, a light goes on in my head to say, all right, I got to call this one. I got to call
• 1:22:17
  that one and that. And that's why it's really been interesting is that we've made so much progress
• 1:22:22
  because in my everyday travels, I've literally been to almost the whole company in the last eight
• 1:22:27
  weeks. I think I visited, I think I've got two cities to go. And I've learned all of this
• 1:22:33
  on the road. I hear every single thing that they say. And then I go and I try and go to the various
• 1:22:38
  departments to try and fix them. How much of how much of your success you think has been has been
• 1:22:43
  tied into you being so hands on? It's all of it. You ever see the movie Bronx Tale? Yeah. When he says,
• 1:22:50
  you know, I could live in any neighborhood I want to you know why I live here? Because I could
• 1:22:53
  spot trouble in an instant. Troubles like a cancer, you got to get it early or it kills you.
• 1:22:58
  Okay. You are not involved in the business and you are not hands on in the business. How are you
• 1:23:04
  going to see the accounting example I gave you probably would continue for five more years
• 1:23:09
  if I didn't speak to that agent and then tell me something. We had some other technical kind of
• 1:23:14
  thing going on that somebody told me about in California that I dealt with. If I'm not hands on
• 1:23:19
  and I'm not at there, who's going to do it? And listen, the company's been around for a hundred
• 1:23:23
  years. So the problems that we have now have probably been going on for the last five or 10 or
• 1:23:27
  20 years that nobody is fixed. Now we're fixing them. Tans on. It's always hands on 100. Forget it. Go
• 1:23:35
  do something else. Go buy a company that makes tractors or something. You know, don't be in a
• 1:23:39
  business like this. Even that I think it's not hands on is the point where you're going to be
• 1:23:43
  disrupted by somebody who is moved out. Active management. Yeah. Very active. What would be
• 1:23:50
  some of the tough questions that I wouldn't know from shareholders that they're asking you that
• 1:23:55
  you want to put on the record? Well, I don't know if I if I was a shareholder, you know, obviously
• 1:24:02
  were public. So I'll be, you know, I got to be a little bit careful. But me being a shareholder,
• 1:24:07
  one of the questions that I would be asking, I'll give you that. I'll give it to you better,
• 1:24:10
  right? Because it's the same thing as that you say that. I want to know who my management team was.
• 1:24:16
  I would want to know who the CEO is. Obviously, like we're talking about. I would want to understand
• 1:24:20
  the competitive landscape. I want to understand our financials. And I speak just so you know,
• 1:24:25
  I speak to a lot of our shareholders. Okay. I spoke to one of our shareholders last week. I was on
• 1:24:31
  the road. I was in Texas and on the road, you know, he emailed me a couple times and, you know,
• 1:24:36
  he was away the honest way, whatever. But I got on the phone with him. And the first thing he said to
• 1:24:40
  me was, wow, you're the first see time I was able to get someone on the phone like this. And I
• 1:24:46
  said to him, which is 100% accurate. I go, I will speak to any shareholder. They can own one share
• 1:24:52
  or a million shares anytime they want because if they tell me one thing, okay, that can help our
• 1:24:59
  company, okay, or increase our value, I want to hear about it. And I said, am I never understood
• 1:25:05
  how Disney would ignore Nelson Peltz. You know, Nelson Peltz was all over Disney.
• 1:25:10
  They didn't want to give him a board seat. They didn't want it. The guy's a productive guy.
• 1:25:14
  The guy's a multi billionaire. He's made an absolute fortune. Why would you not give him a,
• 1:25:18
  he's a owns a lot of stock. It's not like he's a guy that owns no stock. Why wouldn't you put him
• 1:25:22
  on the board? What are you afraid of? Okay. So I never could understand at me. But this is before
• 1:25:28
  being in the role that I'm in. Why a CEO would want to talk to shareholders did betting on you. Yeah,
• 1:25:34
  I don't know stock because they're betting on you. Okay. So we, I listen, I spoke to another
• 1:25:38
  you a much bigger shareholder a month or two ago. I said, I'll tell you anything you want to know.
• 1:25:44
  Obviously, obviously, it's got to be within the SEC and the rules and all that kind of stuff.
• 1:25:48
  I'll tell you anything you want to know. And I said to him, which is true. I go, listen,
• 1:25:52
  if we don't do well, I promise you one thing. It's not going to be out of a lack of effort. Okay.
• 1:25:57
  I literally at that time, I was literally sticking three hours a night. I'm not joking. Okay,
• 1:26:01
  I said, I'm putting 24 seven into this. I'm doing the best that I can do. I'm working my
• 1:26:06
  bottle off like you've never seen. That's the only thing I can guarantee you. Okay. And I think we've
• 1:26:12
  got a good plan. Okay. I think we've got a tough industry that we're in that's going through a lot
• 1:26:18
  of changes. Interest rates are high. Right. There's a lot of headwinds that have nothing to do with us
• 1:26:24
  that are macro, you know, difficult to deal with. But the one thing I could assure every single
• 1:26:30
  shareholder is, I am working my bottle off like you've never seen. Okay. And I bought a million
• 1:26:37
  shares of stock like three, four weeks ago. Okay. You're my own money. You're investing this.
• 1:26:42
  Okay. With my own money. And I can tell you another thing is as long as I'm the CEO, I'm a buyer
• 1:26:47
  of a stock, not a seller of a stock because I bet on myself as simple as that. And I think that
• 1:26:54
  you know, we're working really hard. But you know what? When you say this, I don't look at,
• 1:26:59
  I have like three constituencies, right? I've got shareholders, I've got agents, and I've got
• 1:27:04
  employees. And I'm really a believer in this though. I believe if you treat your agents the right
• 1:27:09
  way, if you treat your employees the right way, who are your team members, right? Your stock will
• 1:27:14
  take care of itself. Okay. I'm not a believer in, oh my god, I got to focus on the stock to stock,
• 1:27:19
  the stock. Of course I care about the stock. My, my own compensation is tied to the stock. I own
• 1:27:26
  stock that I bought in the market. Okay. I would say care about that. But I care about where I get to
• 1:27:31
  at the end. And I really believe the result of a higher stock price will be with the, I'm sorry,
• 1:27:38
  the work with the agents, the work with the employees, the work with getting the companies,
• 1:27:42
  financials where it will be ultimately gets the stock where we need it to be. And it's a, it's a
• 1:27:48
  multi prong thing and all of that matters. It's not like you just say, all right, I'm focused
• 1:27:54
  every day, I'm making sure my stock price goes up. If you do everything that you need to do,
• 1:27:58
  the result is your stock will go up. Is that a, is that like a novel way of thinking?
• 1:28:03
  Well, listen, I sold to private equity before and one of not stonepoint but a different private
• 1:28:08
  equity kind of business that I sold to all they cared about was they would literally on the,
• 1:28:13
  they 15th of the month, they'd be like, what's the number's going to be like in 15th? What,
• 1:28:17
  it 12 days left in a month, what other numbers, they would literally call us every day and say,
• 1:28:20
  what are the numbers going to be? And I used to say to them all the time, guys, we can get to the
• 1:28:24
  same place without running the business this way because it would rattle the hell out of our employees.
• 1:28:29
  They felt so under pressure, they felt like they couldn't work, they felt like they were getting
• 1:28:33
  denied the resources that they needed to grow the business. And I just thought the tone and how
• 1:28:38
  they did it. I thought that if we would just let me deal with this, that's what I was saying to them.
• 1:28:43
  Okay, I promise you the numbers will be where you want them to be. We don't have to be like a
• 1:28:47
  Darth Vader-ish way of thinking, right? Ultimately at the end day because what makes stocks go up are
• 1:28:53
  earnings and good businesses. And the only way you can do that is by having agents that are really
• 1:28:59
  happy to be there, employees that are working hard every day. So it's a cumulative thing. It's not a
• 1:29:04
  one, oh, my shareholder, my shareholder, my shareholder. It's almost like when you focus on stocks,
• 1:29:08
  you're focusing on the lagging indicator, not the leading indicator of success. Yeah. Well,
• 1:29:13
  some of them, they're way higher than they should be, and their reality comes in also in the stock
• 1:29:18
  goes to nothing. They go there because you don't have anything else. You don't have to buy the
• 1:29:21
  metals. Correct. Where you do a bunch of press releases that are BS and a bunch of people buy
• 1:29:26
  the stock and it goes up. But at the end of the day, you pay the piper. You got to build a good
• 1:29:29
  business. And if you build a good business, you should have a good stock price. What do you want to
• 1:29:34
  tell people about the future of Douglas element, what you're going to do, things to look forward to?
• 1:29:39
  Listen, I think there's a lot to look forward to for us because I think that, you know, we're very
• 1:29:45
  focused on our technology. We're very focused on our brand. We're very focused on our marketing.
• 1:29:53
  We think there's an international opportunity for Douglas element. I think that the residential
• 1:30:00
  real estate brokerage is going through a lot of changes. And I think the size of our company
• 1:30:05
  and where we are positioned in the market is going to give us a lot of opportunity. And then
• 1:30:10
  opportunity is going to be organic. But I think we could have some M&A opportunity. I think there's
• 1:30:14
  going to be we're going to get the ability to swing it up pitch. We're going to do it the right way
• 1:30:19
  and we're going to wait for the right pitch to come in. But I think that we can ultimately be
• 1:30:23
  really opportunistic, whether it be in more residential real estate brokerage, buying more of that,
• 1:30:29
  whether it be more diversified, you know, type businesses that are out there. We're looking at
• 1:30:33
  some really interesting things now, you know, on the insurance side, on the technology side,
• 1:30:39
  on, you know, traditional type businesses like mortgage and title. The things that everybody,
• 1:30:43
  you know, does obviously nothing specific, you know, we're a public company obviously. So, you
• 1:30:48
  know, but we're always looking and everybody should know, you know, that we're always looking.
• 1:30:52
  I love it. Okay. What would be some last words of wisdom for the entrepreneurs in the audience?
• 1:30:59
  We've gone through a lot and we've gone through a lot of your career, but something else you just
• 1:31:02
  want to leave them with. Yeah. What I would say is, is that, you know, I kind of get back to that,
• 1:31:07
  you know, hard work thing. You also have to be smart, right? I mean, you can't just be a hard worker
• 1:31:13
  and that's it. You have to pick something or go into an industry. The first thing is do something
• 1:31:18
  that you really enjoy and you love doing because you will work harder at it. You'll enjoy working harder
• 1:31:25
  at it. Be really straightforward and honest, get as many constituencies and people around you.
• 1:31:33
  I had a lot of mentors. Some don't even know that they were meant to me as I was coming up and
• 1:31:41
  look at successful people and try and replicate their habits. So, like, I had known, I was lucky that
• 1:31:48
  I had met a lot of successful people as I was growing in my 20s and 30s and I would try and replicate
• 1:31:53
  their habits. So, it's not really even so specific of, can I replicate the business that they're
• 1:31:58
  in or that you always have that, but look at the things they do, like calling someone back
• 1:32:03
  immediately, responding to emails and texts right away, right? Those were habits that I saw
• 1:32:10
  of really successful people, I mean, billionaires that didn't have to do that and they still do it.
• 1:32:16
  Me, I'm one of the most responsive people you will ever see in your life. I'm still that way,
• 1:32:20
  I have not changed and it just, it breathes good things, but watch what successful people do and
• 1:32:27
  try and emulate them. I love it. What would be one habit outside of just being responsive and being
• 1:32:33
  on it and sort of all the sort of the traditional entrepreneurial tropes and whatnot that I think
• 1:32:40
  people understand what else would be like a unique habit that you've adopted that's worked really
• 1:32:45
  well for you. Well, you always have to be thinking outside the box. You've got to be like I'm
• 1:32:53
  always thinking like I'm going to leave here, get in my car, I'm probably going to look at all of my
• 1:32:58
  texts and I'm going to be thinking about the meetings that I had today and what I could do with them,
• 1:33:07
  what I have tomorrow, like constantly, but you give yourself space to be creative to think.
• 1:33:14
  So in the shower, that's where I have my space, I'm going to say no because if you hammer yourself
• 1:33:18
  all the time with nonstop work, you can't really think outside the box because you're always,
• 1:33:23
  yeah, that's 100% true. You do have to find, you know, I'll tell you what I did do for a long time,
• 1:33:28
  I haven't done it in a while. I used to journal. Yeah, I used to journal about a lot of different
• 1:33:33
  things. I mean, we could have a podcast on how I came to journaling and how I kind of used to
• 1:33:38
  study the mind. I used to read a lot about the human behavior, the mind, why people do what they do,
• 1:33:48
  how people think, you know, why people think a certain way, how to judge how somebody thinks,
• 1:33:55
  looking at somebody's actions and see the actions that they took is because of the way they think.
• 1:34:00
  I've spent a lot of time over the last 20 years studying how the mind works and it is done,
• 1:34:06
  it is giving me enormous tools to be able to truly function in an environment and see what people
• 1:34:12
  do with the good parts of it, the bad parts of it, maybe not judge something that you may have
• 1:34:17
  judged before, right? But the other, that's the other thing I would actually say because I,
• 1:34:21
  you know, I mean, you let this came up because that's what I really should say is study the human
• 1:34:27
  brain and its emotions. And really that YouTube has an enormous amount of people on YouTube,
• 1:34:33
  you can literally, I'm not a big book reader, I'm a big watch a clip for 15 minutes or 20 minutes,
• 1:34:39
  maybe read 10 pages of something, whatever, maybe find my information online, but try and understand
• 1:34:45
  human behavior and human thinking because it will help you enormously as a leader and let you see
• 1:34:52
  through people. My ex-wife says to me, I'm a human lie detector. I like that. And you got it, but you
• 1:35:00
  got to do the work. You have to do the work and I will tell you I have done the work for 20 years.
• 1:35:05
  And when you asked me before is what doesn't keep me up at night, I used to be kept up at night.
• 1:35:10
  25 years ago, 20 years ago, I used to worry about a lot of stuff. I used to have anxiety of,
• 1:35:15
  oh my God, what this doesn't work, that doesn't work. I don't have that anymore. I really kind of
• 1:35:20
  did a lot of learning about the mind in a child, why you became who you are, you know, what emotional
• 1:35:27
  things that you have left over from childhood. There's a lot of things that go on there that you
• 1:35:32
  really need to understand. What I mean, that is an entire podcast. We don't have to go down that
• 1:35:37
  rabbit hole. Maybe one time you can do another one, but what would be words of wisdom for people
• 1:35:44
  that do have a lot of, again, entrepreneurs have a lot of anxiety, entrepreneurs have a lot of
• 1:35:48
  built-up emotion. Is there some quick ideas? Meditation. Is that it? Meditation? It's very hard to do.
• 1:35:57
  It's very hard to, when you're an entrepreneur, you have someone's going on to stop your mind.
• 1:36:02
  Even if you do five minutes, 10 minutes, whatever it may do, go find a chair that's really quiet,
• 1:36:08
  close your eyes, come up with a mantra. I did TM where they actually give you a mantra.
• 1:36:13
  Come up with a mantra that clears your mind, do some meditation. Obviously, exercise is a very
• 1:36:20
  big thing. I play paddle, padel, you know, like five days a week. There's a lot of things you can do.
• 1:36:25
  You got to slow that mind down. You got to slow it down. It's really, really important because
• 1:36:29
  that five or 10 minutes that slows your mind will give you three more hours of power in your mind,
• 1:36:35
  you know. And I also believe that if you're already, if you're always running with anxiety,
• 1:36:39
  then it's like elevated cortisol. It's a clock on your life. It can just be stressed. We'll kill you.
• 1:36:45
  Okay. You've gone through a lot. I want to give people the chance to connect with you, reach out
• 1:36:50
  with you. Where should they go? Website, you use any social LinkedIn? What do you want to?
• 1:36:55
  I mean, I guess, I mean, I guess someone Instagram, I mean, I don't know how people can like,
• 1:37:01
  reach out or whatever. I mean, obviously, I'm always, or where do you want to send people?
• 1:37:06
  Well, it doesn't have to be you. If you, if people want to learn more about Douglas
• 1:37:08
  Elliman, if they want to get in touch with eight, I mean, have the website, right?
• 1:37:11
  They have the website. I think we have, I think we have like a name. Do we have like an email?
• 1:37:15
  I don't know. I don't know if we want to give that out or that would be crazy. We don't have to
• 1:37:18
  give an email out, but if you want to, any links you have, just put them in the show notes.
• 1:37:22
  If there's events coming up or anything, whatever, it doesn't matter. We'll do that.
• 1:37:27
  Last thing I like to ask, obviously, you've had a lot of, a lot of different
• 1:37:31
  lessons you've spoke about on the show. Out of all the things you've learned, if you could only
• 1:37:37
  pass on one thing to your kids, only one lesson, the most important one, what would it be?
• 1:37:44
  Don't worry.
• 1:37:46
  Worrying is the worst thing you can do. It's useless. It doesn't help you.
• 1:37:52
  And nobody on their deathbed said, I didn't worry enough. I wish I would have worried more.
• 1:37:57
  Worry is the worst thing you can do. And I was a warrior too. I used to be a warrior and I undead it.