Brokerage Models, Franchisors, Interviews, REALonomics
REALonomics Interviews Bug! Founder
February 27, 2008 by REALonomics · 18 Comments
Kevin Seney knows his way around the real estate and mortgage industries. He’s comfortable talking about both and equally comfortable addressing their dark sides. Our paths crossed recently and I began to explore his new franchise concept Bug! Realty.
Although REALonomics cannot address the validity of Bug’s economic model, its brand, marketing, emphasis on cyber agents and offices, lower overhead and a commitment to meeting the needs of the consumer in a transparent way caught our attention.
We tracked down Kevin and found him as open as his model. He was eager to share with us his vision for Bug! Realty and the the real estate industy itself. Kevin discusses his own franchise offering, comparing it to what he calls the “tired…instituional…not current” traditional brands. The following excerpts come from our exchange with Kevin Seney. For the full interview, click here.
REALonomics: Can you tell us who Kevin Seney is and about your real estate background?
Seney: I have been involved in real estate since I was a teenager. Growing up in Wyoming, I had a remodeling business in high school which led me to building spec homes when I graduated. We eventually lost our butts, when our construction loans went to 18%, but I learned some valuable lessons at 20.
I started my own Mortgage Company, The Home Loan Store, Inc. I opened the company in a small, highly visible downtown retail space, right next to Starbucks. I finally sold the company in 2000 and took some “much needed” time off.
Looking back at my experience working with Realtors® I walked away with a very unique perspective on the business of real estate. I was always amazed how much money Realtors® spent on “Image Advertising” and “putting on the show,” but as an insider, I knew how INEFFECTIVE it was for them. Meanwhile, I felt like consumers were all laughing at the industry. The economics of real estate were changing quickly. Real estate needed an “Image Makeover.” I HAD MY IDEA!
REALonomics: As you know, REALonomics is in a perpetual quest for what we call “Model Perfect†because we think the real estate industry and its relationship with the consumer is in dire need of a transfusion. What makes Bug Realty a unique model in the sea of options for brokers/owners and agents? What are your core value propositions and distinctives?
Seney: First, let’s talk about our brand. Existing real estate brands are tired and institutional. They are not current. They are from the 1970′s.
Our brand is NEW. It is COOL. It stands alone in the industry as being COMPLETELY DIFFERENT. People love to talk about Bug! Our brand has personality. Our brand is clearly distinctive!
REALonomics: What prompted you to create Bug Realty and what’s the message behind the bugs?
Seney: I saw a clear opportunity for this model. The market is wide open for change. The message behind the Bug goes clear back to my original objectives with brand development. I set out to create a brand that was simple, yet cool and consumer friendly. Something New! Something Fun! Something Remarkable! Something that signaled CHANGE.
Here is what all the experts said: Powerful brands are simple. Powerful brands are memorable. Powerful brands carry significant emotional meaning to the consumer. As a result, people talk about powerful brands. Consumers love us. They love Bug! simply because they already did.
REALonomics: What do you see as the major trends that are present in the real estate economy that can harm and/or help owners get a grip on their business and its profitability equation?
Seney: We could not have launched our franchise at a better time. I would like to say that I timed it that way, but our experience so far, has been that the entire industry is looking for something new.
Consumers are also licking their wounds, recalling the guy in the $100,000 car who sold them the house that is suddenly without equity. The consumer wants change too. People are becoming economy and ecology minded. Our message is being well received.
The more difficult the market, the more our model makes sense. Every day I hear of established brokers going out of business. Can’t pay the rent.
REALonomics: Does Bug Realty have any relationships with core service providers such as mortgage, title, escrow, home inspection, etc. and how do these work within the organization’s framework.
Seney: So far nothing. The industry is still floundering and not paying much attention to new opportunities. Coming from the mortgage industry, I also believe that the consumer wants freedom of choice for both mortgage and escrow.
Keep it Simple, is our motto. When the time is right we will tie up with a national lender for marketing reasons and a shared web experience but I still believe in local people making their own choices, in their own markets, with local service providers. This is still a “People Business” and we want to keep it that way.
REALonomics: Apart from the Internet, what are the components of your technology platform, that is, your internal technology tools that you bring to the table for owners and agents? Do you espouse transaction management; tablet PCs or any of the trendy technology solutions?
Seney: We require all agents and franchisee’s to have the basic “Bug! Virtual Office Package” which consists of a wireless laptop, cell phone, eFax and online forms, and business software.
We are exploring many options such as agent blog sites, internet marketing options, and an array of transaction management software.
Recently, I made the decision to standardize our Franchise on the Apple iPhone. All agents will have one. Why? They make us even more portable. Our agents always have internet access, even in line at Starbucks. And, most of all, they are just cool. We are a cool company. It works.
REALonomics: Are you seeing broker/owner profitability problems in the current market situation and do you think the industry is going to see the closing of doors with respect to real estate brokerage firms.
Seney: We already covered this, but again, it is clear that there is a lot of “fixin” to be done in the real estate industry. Doors are closing daily, across the nation. We believe we have the solution.
REALonomics: We have a readership of thousands of people from all aspects of the industry including franchises, title, mortgage, owners and agents. What’s the most important message you have for the industry as a whole?
Seney: Join us! We have an incredible future ahead. We are pioneers having the time of our lives. We are creating something really cool. We need leaders. We need visionaries. We need regular people.
In December of 2007, we closed out our first round stock offer of our Series A Preferred. We are already planning a second round offer later this year. We exceeded our plan for 2007 by 118%. Our costs were HALF what we expected!
2008 and 2009 will be explosive for this company. Our franchise is currently approved in all 50 states. We have a regionalization plan already in place. We have already sold our first Region: Welcome Region ONE in San Francisco, CA.
Every day I wake up and pinch myself…is this really happening?
REALonomics: What question would you most like asked of yourself that we have not asked and what’s your answer?
To see the Kevin’s answer to this question and other you may retrieve a complete copy of the interview by clicking here.
Related posts:
Bug real estate sounds really cool.
However it seems like just another variation of Redfin or Zip Realty.
Especially the use of the VW bug (yawn)-Zip already did that with their ZIP Mobile. While the concept sounds good, in reality, as a 21 year real estate veteran I can tell you that the VW Bug is not a very practical car for driving people around to view houses. Unless you only have one passenger, the rear seat is not very comfortable, especially for tall people. This is probably why ZIP Realty stopped using them and switched to a much more practical car.
Even though Bug has some really cool and contemporary ideas, the key to success in real estate is not the gimmicks a company or agent has, but the expertise of the agent actually serving the consumer. You can be the coolest company in town, but if your agents lack true expertise, you will have a tough time making enough sales to be profitable.
Real estate sales is far more complicated than most people realize.
While having the right tools can be a big help, the real estate business is a people business and having good people skills is the most important tool that a real estate agent needs to become successful in real estate sales.
To the best of my knowledge, the founders of ZIP Realty, prior to starting their company were never successful agents with previous years of experience selling real estate. Consequently, like most members of the general public they thought that selling real estate was not that complicated and could be easily streamlined. Well the realities of the business hit them smack in the face and despite all of their advanced technological tools and their tens of millions of dollars in funding, they discovered how difficult is was to build a large and profitable real estate company.
Scott Kucirek, the key founder of
ZIP Realty, who invested tons of blood, sweat and tears to build ZIP is not oly no longer with ZIP but left ZIP to work for Prudential Realty! – the “old fashioned” type of company/traditional brokerage that he tried to replace with ZIP. Why in the world would he do that? I don’t know the answer to that but it probably had to do with facing the realities of life: selling real estate is not an easy business.
Anyone who really works hard can achieve a measure of success. Time will tell how successful Bug will be. Personally I think their success will be rather limited due to the “people factor”. A cool brand is not enough – remember Pets.com?
Kevin has been an inspiration to the branding of our Caribbean Islands Realty business. We have created an internet business representing 28 worldwide developers in the Caribbean by just using our blog site as the marketing method. It has been quite a ride. Kevin and his Bug! branding has been a very open resource for us…and we don’t even have any connection to Bug! He has done this because of his excitement of sharing. I tip my hat to Kevin and what has created from just a simple idea two years ago. Congrats!
Jim
Jason is right on with respects to Zip. I worked for Zip in the early days. The VW Beetles were my idea. Unfortunately, Millions of Dollars of Venture Capital and a Berkeley MBA is no substitute for experience.
Where ideas work that may not have in the past, is when branding messages and consumer expectations meet.
Our brand promise is Real Estate (Made Simple) and we keep it that way.
Zip Realty was a complex attempt, during the dot com days, to take the agent out of the picture in a “people business,” and although Juan and Scott were very bright guys, the dot com mentality was hard to shake.
We began Bug! Realty with a clean slate and simple goal of creating a NO FRILLS model of real estate.
At first glance, people think gimick. But the difference, although subtle, is that Zip Realty in all it’s complexity, driving VW Bugs, does not have the same branding integration and marketing leverage as Bug! Realty driving VW Bugs.
Good Branding is all about MESSAGE, IMPACT AND RECALL in a world flooded with advertising messages. In today’s busy market place, you are leagues ahead of the competition, if you can simply overcome the massive hurdle of just getting the consumer to REMEMBER YOU!
We have achieved that at Bug!
Real Estate is Real Estate. It is about people and relationships. Our model opens the door for good agents to prove themselves. The rest is up to them.
Thanks for your perspective, Jason. KS
What an amazing brand you have achieved with Caribbean Islands Realty! The only thing missing is about 10 convertible VW Beetles buzzing around St. Thomas, delivering your clients to their new dream homes. Bug! Caribbean Islands Realty, has a nice ring to it! Thank you for your comment, Jimbo… KS
“Our model opens the door for good agents to prove themselves.”
Much more than a great brand, this statement is what will determine how big and successful Bug Realty becomes. The number of good agents working for Bug Realty, or any other company for that matter, is what will determine how successful the company will be. I think that finding a large number of good and highly productive agents to join the company is a tougher job than building public awareness of the company. Good luck!
That is truly the key. It is about the Agent! All the advertising and promotion in the world, won’t sell a home, without good agents to make it all happen. We are focussed on creating an environment where agents can build and grow, a successful business of their own. Thanks Jason. KS
Bug! has created an excitement here in Western Colorado! I get comments all the time, get stopped and flagged down. As a Franchise owner, of BUG! I could not be happier. People have the confidence that we are approchable and they approach us! Get more smiles and comments about the cars! Kids love them. The business has a simple concept and in Colorado, the lifestyle matches the business. We are having fun with the new concept, although we are new, our footprint is growing as evidenced by the amount our phones are ringing! I am a believer in the billboard advertising concept. It works! Thank you Kevin!
I agree with Jason, finding the agents…I know I have a bunch think about it, when they are not happy, I will be the destination. Patience,I tell myself, but they will be mine!
Bug is so appealing that agent curiosity has them call and just asking…could I have a better entry?
Patti
Patti Barrett, was the proof we needed for our model. Patti is our latest franchisee in Grand Junction, CO. Patti is a seasoned veteran, 20+ years in the business. “Been there, done that” at every major brand in the business. Bug! has changed Patti’s business, because suddenly she is having fun again. It may sound simple or minor, but when you are “having fun again” in your business after 20 years, you can take your experience, and combine it with the blind ambition and great attitude of someone new in the business, and actually get some awesome results! Patti makes my day, every time she shares here awesome stories from out in Colorado of Bug! turning heads, everywhere she goes. Welcome Aboard, Patti & Shawna! See you soon at our Napa Retreat! KS
Kevin has certailnly created a cool brand that is so distinctive in the real estate industry. Once a few major cities in the country prove that it could be successful, this concept will catch on across the country. I am the Regional owner and Director for Bug in San Francisco. I truely believe that BUG SF will be the new hope in currently sagging real estate business.
We view San Francisco as the “crown jewel” of our franchise system. To open in such a key market so soon, will create tremendous national momentum. And, to have such an experienced entrepreneur, like Chris Siow, at this early stage, will prove to be a significant strategic advantage as we expand nationally and internationally, because of the high-profile and “highly visible” nature of the San Francisco Market. We are truly excited about San Francisco opening in 2008. Congratulations and welcome aboard to Chris Siow! KS
I first learned about Bug! Realty on this very blog. Intrigued, I wrote to Kevin and then spoke with him by phone. I’m impressed to say the least with his “Purple Cow” of an idea. I sold real estate franchises for ten years and achieved considerable success in a business where the sky is always blue. Franchising in real estate has always been about “identity” not a patented business system. Kevin’s re-introduction of a symbol is akin to the days when Marsh Fisher and Art Bartlett brought the gold coat to Century 21. In a vanilla industry, Hoorah for a new symbol expressing the joy and attitude of Bug! affiliated real estate agents. Put in a call to VW…we’re going to need more beetles!
Mike – It’s great to see a Pru guy frothing!
I was with the first Pru franchise in AZ, Prudential Mull-Smith Realtors and became their Gen. Sales Mgr. My last Pru company was sold in April, 2005 and I am devoting my time to http://www.ePartnerUSA.com, http://www.CityBlogUSA.com and this blog, of course. Our brands have gone stale, as Kevin states and seeing something new had me foaming at the mouth as well.
I made the decision to interview Kevin because his market model was clearly designed to convey something new to the consumer and for that reason alone we awared it our Model Perfect Award. You are correct, we’ve gone vanilla, the consumer is bored and frankly, so am I.
-Donald Teel, Founder REALonomics.net
The Bug franchise has given me an exciting opportunity to have a great brand for a Real Estate company to enhance my existing Mortgage business, with established successful real estate agents in place. The attraction to “Bug” is the unique appeal it has to the general public. It takes a relative complex transaction and make it simple. I thank Kevin for this wonderful chance at the grass roots of this new concept.
On March 7, Bug! Realty USA, Inc. will host our First Annual Franchise Owners’ meeting in Napa Valley, CA. All Franchise owners and agents will be attending this 3 day event at a private Bed & Breakfast Inn in Napa.
Our Bug! Franchise owners will gather for round table discussions on ways to leverage the Bug! brand to improve their business. I will be presenting my Vision for 2008 and the results of a very successful franchise launch in 2007.
Special Guest Speakers, and round-table participants, will be Jim Walberg and Ann Marie Nugent of The Bay Area Team of Keller Williams Realty. Jim and Ann Marie were recently honored by Keller Williams, at their annual retreat for achieving the highest level honor as Platinum Members. Jim & Ann Marie will be sharing their most successful methods for building a referral based business and their personal perspectives on future trends in Real Estate.
Kevin Seney, Founder & CEO
Bug! Realty USA, Inc.
Jason, I am seasoned enough that I tend to make my clients feel that they are the only customer I have…they get my total attention. Seldom do I tell them how many calls or stops I made on their behalf. They believe it just went smoothly.
I did not purchase BUG! becuase I needed help, I was and am doing fine, but in our great economy in Grand Junction, I wanted to expand…get coverage with a national name, BUG! is the brand that tickled me, brought the fun back, gave me the attention I wanted to generate for expansion. I love the down to earth, back to the basics concept and the general reception people give me is that is about time someone worried about the customer and was not afraid to smile. Afterall, my VW BUG! is a smile.
I do agree that if you are not a good Realtor, a name brand is not going to help, but this good Realtor wanted BUG! to generate comment and remind people to call me….to generate even more business.
Kevin,
Catchy and Creative Concept. Brilliant Branding. Simple and effective business practices. . .and the ideas just keep on coming!
You have done it. I am beside myself with joy for you. You truly deserve every minute of success. Each franchisee and each agent who sees the unique value of Bug! will earn their way to Realtor Heaven.
Here’s looking at you, kid.
Sali
The Bug! Realty Story – As the Executive Producer of the Profiles Series hosted by Lou Gossett Jr. we are excited about Bug! Realty being featured for a story on unique franchising opportunities in Amnerica. We look forward to informing and educating our viewers about the vision and mission of CEO Kevin Seney as well a the inovative individuals who are a part of the company. For more on the Profiles Series visit us at http://www.profilesseries.com