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Makers of Tomorrow: RE/MAX CEO Adam Contos



October 26, 2020 9 min read

Opinions expressed by Entrepreneur contributors are their own.

Makers of Tomorrow is a new series of Entrepreneur-exclusive interviews that extracts expertise and insights from the innovators of today who are shaping our future.

Real estate is an entirely different than it was 20 years ago and, in many ways, very different than it was even one year ago. For the most part, that change has come about due to the influence of technology — emergent digital tools and software that have disrupted nearly every facet of the market. 

In addition to navigating the property technology, or proptech, phenomenon, real estate has been faced with the same difficulties as other industries worldwide — transitioning to remote work, dealing with supply chain breakdowns and managing the ongoing effects of a global pandemic.

If there’s anyone who understands these challenges and the types of creative solutions they require, it’s RE/MAX CEO Adam Contos. I recently caught up with him to get his take on the future of real estate and leadership in uncertain times.

With so much changing across not only the real estate ecosystem, but also the greater business landscape over the past few months, what have you been able to apply not only personally but also for RE/MAX as a whole?

There’s a saying that “uncertainty is resolved by constant communication” and this year has proven that it rings true. From the start of the pandemic, our executive leadership team focused on being visible, supportive and transparent with our 500+ employees and our RE/MAX and Motto Mortgage networks. We launched weekly Live broadcasts, increased training, ramped up communications and participated in countless Zoom calls.  Our goal was — and still is — to keep brokers, agents, loan originators and staff informed, inspired and motivated to keep pushing forward. A personal lesson I’ve also applied to my business approach is to view health in a holistic way. On Facebook Live every Thursday, I share my thoughts on the connection between mind, body and business. I try to provide constant value to the people in our networks, and I hope I inspire them to start each day with a win (my motto).

Most importantly, a lesson I learned from previous RE/MAX leaders was to double down, not pullback, on support during a crisis. This was extremely beneficial to our networks and ultimately, the consumers our people work with. We’ve seen other players and industries pullback in uncharted waters, but we have a strong enough foundation to actually increase the service, tools, training and technology we deliver. It’s a huge advantage to deliver extra value when competitors go quiet. By offering financial relief to our brokers, providing new technology tools to help them do their jobs better and hosting world-class virtual conferences, we helped our RE/MAX and Motto Mortgage memberships get through the toughest times. It was the right thing to do and the goodwill it generated will pay dividends for a long time. That was a huge lesson for us all. 

Related: 25 Leadership Lessons Your Business Can’t Live Without

Given the current climate, why would anyone want to buy a franchise? Especially now?

Because matters. Brand creates trust and visibility for those who use it. Every new RE/MAX franchisee benefits from 50 years of RE/MAX brand awareness and visibility. Think about the difference that can make for someone who decides to open a business in times like these. They have a head start and a clear advantage over someone who opens a mom-and-pop operation with zero visibility or built-in trust.

Plus, factor in the services and resources available at an established brand like RE/MAX. Franchisees don’t have to start from scratch, as their independent competitors do. They get instant access to state-of-the-art systems, services, training, technology, marketing and a whole host of other things as part of a franchise network. They also enjoy the benefits of scale and collective buying power. And in the case of RE/MAX, they get instant connections to colleagues all over the world. It’s a far cry from opening an independent office, putting up a sign and trying to figure out what to do next. Franchisees can focus on growing their business from day one – while non-franchisees have to manage through a million issues that have no impact on revenue.

Motto Mortgage, which launched in 2016 and has grown to over 125 open offices, is a little different in that it doesn’t have 50 years of history. But it does have the foundation it shares with RE/MAX, and the types of advantages a fast-moving franchisor brings to the table.

So to me, the question isn’t “why would you buy a franchise during an environment like Covid?” — it’s why wouldn’t you? And it’s borne out in our results. People are buying franchises and opening RE/MAX offices all over the world right now, and Motto Mortgage offices across the U.S., in very unusual circumstances. These leaders aren’t hiding out on the sidelines; they’re moving forward and taking action to improve their lives.

My colleague, RE/MAX Chief Customer Officer Nick Bailey, often cites a wise note from author Jack Canfield, who said your response to an event — not just the event itself — largely determines your outcome (or E+R=O). When it comes to bad outcomes, Bailey says, “unsuccessful people blame the event and successful people blame their own response.” With that mindset, true entrepreneurs can cut through the fear that freezes most people in times like these. And those are the sort of leaders attracted to successful franchise brands like RE/MAX and Motto Mortgage in times of crisis.

How have you advised your network of 130,000 brokers and agents to ensure business as usual and provide leadership as RE/MAX looks to transition to a post-pandemic world?

In a fast-changing industry like real estate, does “business as usual” ever really apply? An interesting thing about the business environment created by Covid is that it forced real estate professionals to adapt and use technology that already existed. Three prime examples are video, video conferencing and virtual open houses or showings. The technology was there before, but the pandemic pushed it front and center. Brokers and agents who were reluctant to shoot videos had to finally jump in. Offices that hadn’t used Zoom and other platforms had to find a way to communicate in a group setting. (As an aside, RE/MAX and Motto Mortgage provided access to free Zoom Pro accounts to every office in the world. Hundreds, if not thousands, of firms took advantage of the offer and logged millions of virtual meeting minutes.) And in the world of social distancing, knowing how to conduct virtual open houses and showings became essential. All of these involved learning new skills, which means professional growth. That’s always a good thing. And all of them will remain relevant in the post-pandemic world.

So, to me, it’s never about “business as usual” or a “return to normal” as much as it’s about always moving forward, always improving, and always finding new and better ways to provide a great consumer experience. That’s the perspective and advice I share with my staff and membership and other leaders in our network take the same message to their teams.

Our chairman, Dave Liniger, always says “If you do business today the way you did it yesterday, you won’t be in business tomorrow.” I think that sentiment is built into our culture — and it’s helped drive our success for many years.

How has technology altered the way real estate agents sell homes, and how will it change the industry in the years to come?

Technology has changed the order of events in real estate. It used to be to find an , then find a house. For many people now, though, it’s finding a house (searching online, generally) and then finding an agent who can help you buy it. And that’s good for everyone. It empowers the consumer, which is great, and it enables the agent to provide very real value when the time is right. After all, in many cities, the market is so hot that simply putting in an offer is not enough.

Agents who embrace technology are able to deliver a better consumer experience. Technology adds efficiency to the process. It cuts down on wait times, reduces paperwork (and will eliminate it eventually), improves communication and keeps everyone aligned. It’s a key part of the puzzle today.

Related: The Switch From Physical to Digital: Technology Transforming the Real Estate Ecosystem

The mistake some people make, usually in fear, is thinking that technology will replace the agent. That just won’t happen. People might be ready to order just about any product online, but when it comes to the largest purchase of their lives, they want a human professional involved. Someone to guide them, support them, advise them and validate that their decisions are sound. And that’s the role of an agent — a role best filled by an agent who knows the area, is an expert on process, can negotiate, can detect unseen issues, and has the experience to keep the transaction on track. As most “disruptors” end up realizing, it’s not as easy as it looks. It’s just that great agents make it look easy.


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The Trump campaign celebrated a growth record that Democrats downplayed.



The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.


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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.



The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.


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Ant Challenged Beijing and Prospered. Now It Toes the Line.



As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.


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