EP05: What It Actually Takes to Move an MLS

Episode Transcript

Katie Smithson  00:00

Everyone thinks that the MLS generally move too slowly when making decisions.

Chad Jacobson  00:05

We have 24 shareholders, 29 shares in play, and each share gets to put a director and an alternate director. We could have up to 61 people in a room when we’re trying to discuss things. Our key decision was to do it a little differently than others. Bringing on a new platform does create a little anxiety amongst some people in the support area, in particular.

Katie Smithson  00:31

What is it about MLS is that people just misunderstand. Welcome to REpod — the organized real estate podcast, for the industry, by the industry. This is where MLS leaders, association executives, and brokers come to rethink operations, simplify complexity, and build systems that actually work together. Join the REcore team as we challenge outdated processes, explore smarter technology, and have honest conversations about the future of real estate. Let’s get into it.

Katie Smithson  01:05

Welcome to another episode of REpod. My name is Katie Smithson, and today I have a very special guest with us today, Chad Jacobson, CEO of PrimeMLS. Chad, how are you doing?

Chad Jacobson  01:19

Very good, Katie. Thank you for inviting me here today to join you.

Katie Smithson  01:23

Yeah, absolutely, we’re excited to have you here and have a good discussion, and you know, let’s just let’s dive right into it. I think why I wanted to have you here today is obviously PrimeMLS is doing some cool things, but I think generally the perception out in the industry is that everyone thinks that the MLS is generally move too slowly when making decisions, but when you look at the complexity of the MLS, the governance, the stakeholders involved, and the potential risk, it’s really not that simple, and part of the reason I wanted to have you here today. Chad, is obviously you are a longtime veteran of the industry. You’ve been at PrimeMLS before it was PrimeMLS. So, let’s start off. Why don’t you give us a little bit more about your background, and, like I said, I know you’ve been around for a while, so give us just a quick run through of how you got started in this industry and how you ended up where you are now.

Chad Jacobson  02:23

Sure, I’ll try to give you the quick version. So, I spent about 20 years in the telecommunications industry, and I was an international expatriate. I’ve lived all over the world, and I was in the product development channel. I was a project manager of bringing products from concepts to to first prototypes and eventual production, and when the when the technology crash happened in 1999 I found myself having recently joined a what was a significant player in that industry named Lucent, but unfortunately I was like last in, first out and needed to kind of restart my career, my sister, who’s been in the business for over 45 years now, so I felt I had some DNA to do real estate, so I got into real estate in the Chicago area, moved to Vermont to join her practice there, and we were a family team, and I volunteered for a small local MLS. I raised my hand and said, “Hey, I’d like to, I’d like to contribute. I think I have some, some skills that, that might be applicable to what’s going on. That led to being put on the board of directors of what was an early version of PrimeMLS. When they acquired that MLS, so I ended up on the board, became president of the board, and eventually had an opportunity to join PrimeMLS as the director of operations. And then, when my CEO suddenly retired early, I found myself sitting in this chair. So that’s that’s the quick history.

Katie Smithson  04:01

Nice. I love it. I love the sister story. I know I didn’t know that you and your sister practiced real estate together. That’s awesome.

Chad Jacobson  04:07

We did. We did. It was interesting, though. You know, if you ever work with family, it’s very difficult to separate business from family

Katie Smithson  04:16

for sure. I did work with my cousin at a former company, and that’s not as close to the ties, but yeah, any family gatherings, it was, yeah, separate the business and the family stuff. Well, given that you have been in real estate for a while and been on both sides of both a practitioner and now leading an MLS, I’m sure you would agree that if change were easy, that it already would have happened, but tell us a little bit what you can about why it takes so long for MLS is to make a change when, in theory, there are a lot of people who agree that there are changes that need to be made and. Mean, you know that could be at the local level, like maybe you’re unhappy with a particular vendor and you need to make a change, or maybe there’s a rule that needs to be updated, or something like that. Why, why does it take so long for an MLS to make a decision?

Chad Jacobson  05:16

Well, I would say whatever governance model is is overriding the organization is going to influence how quickly you can adapt to changes like you’re describing, and and PrimeMLS has a rather unique governance structure. We have 24 shareholders, 29 shares in play, and each share gets to put a director and an alternate director. Okay, onto our body that adds up to 58 and throw in state representatives from Massachusetts, New Hampshire, and Vermont. We could have up to 61 people in a room when we’re trying to discuss things, so it’s a rather difficult group to herd and make effective decisions, but soon after I came on board we entered into a strategic planning role and convinced our leadership that they really needed to take a step back and and play a more strategic role in deciding what it was the company was going to do and free up staff to make more, and an executive committee of a more manageable number to make the more tactical decisions. So that was an early success, if you will. We’ve got the BOD agreeing to our roadmap, and now staff is implementing against that. So governance very important as to whether, whether an organization is going to be inhibited from being able to make timely changes to their, to their structure, their services, and technologies that they offer to their customers,

Katie Smithson  06:53

right. And I mean, given that you do have a large group that is making a decision, I think it is impressive the the decisions that you have been able to to get made and and start making some moves towards, you know, progress in a new direction, which one of the reasons I wanted to talk to you is because you are in the process of standing up a second MLS system, so I wanted to dig into that a little bit more. What was behind that? I know that was part of a part of one of your just strategic decisions that you made as, as you were planning, and it’s a big move. It’s not a, it’s not a small undertaking. There’s a lot of moving pieces and parts to that. So, what was the motivation behind standing up this second system?

Chad Jacobson  07:44

Well, it began with a leadership preference to have some independence from our vendors regarding our data, that was the first desire that was that was surfaced to us, so we leveraged that into, okay, we would love to have an independent database, and at the same time we would like to, as you indicate, indicated bring in a true system of choice for our customers, so we had been very close prior to my becoming the CEO to actually changing our vendors. We got very close, and at the last minute they decided to hold the course, and that gave us, and the we’re a Paragon House right now, and there was a strong desire for many of our customers to switch to Flex MLS from from FBS Main to our north is is an FBS shop and a lot of their members are also our members, so we had a lot of people who are familiar with

Katie Smithson  08:57

on a crossover, yeah, yes,

Chad Jacobson  08:59

so that was the obvious choice for us when we decided to stand this up, our key decision, and we got the agreement from from leadership was to do it a little differently than than others, in that work these are going to be two literally standalone systems, so if you want to play in the Paragon space, fine, go keep, keep on doing it. If you want to play in the in the Flex MLS space, fine, you can do that. And our REcore service, our data hub will be the facilitator to cross fertilize those listings, so that all of the data is visible from both platforms. The only constraint being whatever system is used to enter a listing is the one that you have to use to maintain. Yeah, yeah. So we think that offers true choice. I mean, literally. Really, true choice, whereas many of the other MLS is that have gone down this path constrain LIM to perhaps a third party lim solution, or one of the platforms is the LIM solution. We want the two to stand on their own, and that way customers have true choice, and their decision as to long term, which platforms they want to, which platform they want to use, will be indicative of who’s winning the race.

Katie Smithson  10:32

Yeah, so it wasn’t necessarily that, you know, your membership felt like Paragon wasn’t providing certain features, or there was something that wasn’t working there. It was more just to accommodate the, like you said, that crossover between the main agents and your agents, and really satisfying the needs of, you know, multiple solutions that were out there. So, I guess you don’t have to answer this, if you don’t want to, but like, do you foresee in the future standing up a third system, or even more, or is it just let’s see how this goes, and then you’ll make a decision.

Chad Jacobson  11:12

We’d like to succeed with the first before we make a decision about about adding something else, but I want to stress also that by offering a second platform that makes our organization more technically competent in the space from a vendor solution perspective, and if we were, and this is another one of our strategic imperatives, is to is to grow, and then if we were to be able to help out, let’s say another MLS, or perhaps even merge or acquire another MLS, we would already have the working knowledge of another primary platform, which could make easing customers into our system greatly simplified, so that’s a, it’s a, it’s a, it’s a dual strategy. Yeah, customers what they want, but also set us up potentially for, for growth long term.

Katie Smithson  12:11

Awesome. Well, knowing that, I mean, do you, do you foresee this causing any complication for members, because I can just speak from my experience, being, you know, on the vendor side for many, many years, having a little insight for my time working at CRM, unless before I transitioned over to RECOR. I think no matter how much you try to get the messaging out to agents and brokers about upcoming changes, there’s always a group that misses it, doesn’t read it. I mean, they do say realtors don’t read, you know, like I think there are.. I think that goes beyond just realtors, just to be honest. But you know, how do you.. how do you foresee overcoming that challenge, especially with offering this new platform, and you know, the opportunity for the changes that come along with that brick timeout. If you’re ready to put AI to work for your staff and your membership, it’s time to check out Navigator. REcore is the exclusive reseller of Navigator by Lindy. Head to REcore.net forward slash navigator to learn more, all right. Back to the show.

Chad Jacobson  13:23

Well, I can promise you that even our leadership has had to be coaxed through the details of what we’re trying to achieve. We have to remind them frequently of the way this is going to pan out once it’s all up and running, and I’ve had numerous conversations with, you know, some of our large brokerages to, to reassure them, because as we announced our plan, they were all concerned, oh, it’s a conversion, and everybody hates a conversion, so I’ve no, no, no, no, this is not a conversion, this is you. If you like Paragon, and you want to stay there, you can do that. This is another choice. And by the way, you could subscribe to both if you chose to. So, and let me reflect back briefly on my experience as a, as a realtor in, in the Chicagoland area, back in the early 2000s there were five or six different systems that were available to us while I was practicing there, and, and you would use one for, for limb, for listing maintenance, you would use another for drip marketing, you would use another for customer management, you know, it was pick and choose where you wanted to work, get the best out of all platforms, and I imagine that some of our customers will do that as well, because it’s inevitable that not every platform is going to offer the same tools to their members. So people may pick and choose, time will tell,

Katie Smithson  15:03

right? Yeah, yeah, for sure. Do you think that this opens a door for any fragmentation, or do you think this actually, you know, like you said, I think part of your strategic growth, or your strategic plan, is growth. So, are you worried about fragmentation at fragmenting the marketplace at all, or you feel pretty confident that you’re moving in the right direction, and by offering this choice and kind of opening the door to bring in even more members into your ecosystem.

Chad Jacobson  15:34

So, the New England market from an MLS perspective is different than a lot of the other parts of the country. In New England, there are only 10 or 12 MLS is in our entire region that cover the entire region. So I’m not worried about fragmentation from that perspective. I think Massachusetts with MLS pin has a broker-owned model, and they’re pretty solid in Massachusetts, but some of their members are subscribers to us because they operate in southern New Hampshire. Same with Maine – Maine owns its state-owned MLS, in that case, but some of their members, again, are dual licensed and practice in our territory, so they join us. It’s not like some, some metro areas where you might have 678 mls that a broker needs to join in order to, in order to have full exposure. So, I think we’re pretty comfortable where we are from our region. I don’t see anybody trying to steal members, shall we say, or over dominate the market. I think we’ve all got our spaces pretty well defined here, the question, though, is geography isn’t as important anymore from an MLS perspective. So, there could be, and there are a number of small MLSs that, frankly, underserve their clients from a technology and service offering perspective, because they just don’t have the funding, the staffing, the knowledge to to get the most out of those systems, so they, many of them, just hire a vendor, turn it on, and it’s a set it and forget it type situation for them. Yeah, so I think put some of the consolidation that may occur in the industry will be those smaller MLS, as if they can get over the political side of it, and I think they may be merging into organizations such as ours, and I would say Hive would be a good representation, and Hive is growing very rapidly into a regional stronghold, I think they’re up in the 18 20,000 range now

Katie Smithson  17:42

that’s happened fairly quickly. I mean, that’s been over the past what, two years, maybe since

Chad Jacobson  17:48

I would say three to five years. Yes, they have grown dramatically from what they were. So, is that going to be possible for us? We’ve got some geographic constraints, and as I said, some of the MLS is in our region are pretty solid, so so we would need to perhaps move in a different geographic direction, but I think that’s coming.

Katie Smithson  18:06

Yeah, I mean, I think it’s interesting to see, you know, Hive is a great example, obviously. The news recently of beaches in Miami merger, I think these kinds of changes.. it’s, it’s interesting how you hear people say MLS has moved slowly, and then it’s just like, then this news comes out, and it’s just like, well, that happened fast, so it’s a little contradictory, but I think hopefully is giving some, you know, perspective to the industry, and maybe getting some wheels turning about how we can all just, you know, make decisions a little quicker, and especially when it benefits the membership. I think when you are making these changes to really make the lives of brokers and agents easier to do their jobs, that’s what they certainly appreciate. I would assume, and now really gives you the opportunity to say this is the value that we are giving you, so I guess you know you mentioned you’ve gotten some questions, not necessarily pushback from some of your directors and brokers about what you’re doing. Is there anything, I guess internally, have you, like with your staff, have there been any challenges on that front, of as you try to move towards implementing your strategic vision, especially with this multi-system project, obviously that takes up staff time, you’re learning new processes, got to learn a new system to support, and all those things, anything you can share on that front about staff feelings and how you overcome any of those challenges.

Chad Jacobson  19:46

Well, certainly staff has become very confident and comfortable in working with ICE and the Paragon system that we have. We’ve been customer of theirs for 10 years at least now, so. Uh, bringing on a new platform does create a little anxiety amongst some people in the support area, in particular, in the training area, in particular, but guess what, we, we sold the head count increases in our strategic plan, so we’re starting to, where necessary, you know, create a team of people that will focus on on that new platform, and that’s that’s a that’s a job opportunity for people to expand their their horizon and and learn new things. We all need to learn every day.

Katie Smithson  20:37

Yeah, and I know you brought on some some new staff to some familiar faces in the industry recently, so you’ve got some good hires, and so shifting gears a little bit, so like you know, going a little bit wider, as opposed to just focusing specifically on PrimeMLS outside of just your organization. What is it about MLS is that people just misunderstand, and like this perception that MLS is are moving too slowly. How would you explain that to an outsider, whether it’s like somebody who has no experience in the real estate industry, but I think more particularly to, you know, brokers who have issues with wanting changes made in the, in the MLS, or even, you know, from the vendor perspective, it does take a lot of times, often to get a, an agreement signed, and I understand this from being in the industry for a long time, but I’d just like to hear your take on what people misunderstand when they are working with MLS, is

Chad Jacobson  21:39

well, so if there’s a couple of perspectives here, one is the consumer perspective. Most consumers have no idea what an MLS is, so let’s, let’s just set that one aside. And even the licensees that come in to this space, they think they join, in the case of realtor members, they think they join the local, state, national, and the MLS sort of is like along for the ride, and so we have to educate them. Oh, no, no, no, we’re, we’re our own thing. Okay, yeah, and we’re here to facilitate cooperation, only cooperation now, of course, in the in the sharing of your listing with the other participants, so there’s always a little bit to overcome in that regard. Now our subscriber base, our customer base. Sorry, the last time I pulled the data on this, we have about 17 or 1800 participants, brokers, half of them are individual practitioners.

Katie Smithson  22:39

Oh, wow,

Chad Jacobson  22:40

yeah. And then at the other end of the spectrum, you’ve got the mega offices with five 600 agents in them, so there’s a schism between, you know, the mom and pop shop who don’t have the technical chops to go out and evaluate technology, and the big brokerages who would yell at the MLS all day long. I only want you to supply listing maintenance. My tech stack does everything else, you know, right? Why am I paying for all those tools that I don’t want to use? So it’s a balancing act that the MLS has to, has to perform in order to be reasonable to our entire customer base. So we listen to everybody.

Katie Smithson  23:21

Yeah,

Katie Smithson  23:22

yeah, and I think that’s a great, a great point that I think a lot of people just miss is that you, you know, you’re not making this, these decisions in a silo, you have a large subscriber customer base that you are looking out for, and you know a decision might be good for you know the mom and pops and not great for for the larger offices, so I think walking that tight rope of making decisions that are going to appeal to such a broad audience is a very tough thing to have to to do, and I think the other thing that you know, this is just kind of my take, is vendors promise innovation, right? They’ve got, like, you’re, oh, we’ve got, especially now with AI, there’s just so many options out there, we can, we can solve all your problems, but really, you at the MLS, y’all are the ones that are carrying the risk when you make these decisions to implement these tools, so it’s not, you know, I think it’s, it’s not a bad thing that you are taking your time to make these educated decisions, that’s just me advocating for, you know, I guess just good decision making, and I think that that’s what most MLSS strive to do, is make sure that they are not causing undue stress to their, their customers by implementing changes that you know seem good at the time, but who knows how it’ll play out five years from now, right?

Chad Jacobson  24:59

Yeah, we. Try to be very thoughtful in what we add and remove from our service offering. It’s easy to get bogged down with a lot of tangental non-core service offerings that people, frankly, don’t use. So we’re always looking at our stack of services that we offer, and critically looking at them from, you know, because it takes staff time to learn these tools and educate and train your customer base on it, and so we’re always looking for, you know, hey, do we have a reasonable level of utilization in these offerings, and if we don’t, then we’re going to start sunsetting them.

Katie Smithson  25:49

Yeah. No, I think that’s that’s excellent way to kind of wrap this up. So, I mean, my kind of takeaway from this conversation is that, you know, the future of MLS is not necessarily about moving as fast as possible, but learning to move at a pace that is responsible for the customers that you’re serving.

Chad Jacobson  26:12

Always one of our goals, we have multiple customers, multiple customer bases, if you will, but we, again, we try to be thoughtful and not negatively impact anybody’s workflows to a great extent, because I can remember again as a practitioner there was one little report that that PrimeMLS at the time used to supply to me that I that I turned into a core aspect of my team’s operation while I was working with my sister in in Vermont, and somebody made a change and didn’t tell me, and the whole thing broke, so it all it took, all it took, Katie was one field in in a data feed that was in a different position, you know, somebody inserted something when they should have put it at the end, so it’s very easy to make mistakes, if you will, that have unintended consequences, and we try to minimize those. We’re a bunch of tweakers here, you know, a bunch of MLS nerds, and we’re proud to wear that because we think we do our best for our customers.

Katie Smithson  27:21

Well, that is awesome, Chad. I just want to thank you again for taking the time to talk with us today. I thought this was super insightful, and hopefully everybody out there who is listening now has a better understanding of how MLS is operate and make decisions and why they do what they do. So, thank you so much for being here.

Chad Jacobson  27:41

Thank you again for having me, Katie. It was a pleasure.