TEITR 403 - Scott Bateman

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[00:00:00] Veronica Morgan: In this episode, we pose a confronting idea. What if property management in its current form is fundamentally broken? Owners often feel under serviced, tenants feel unheard, and [00:00:10] property managers themselves are burning out under outdated systems. If the model is cracking under the weight of rising expectations, maybe it's not about incremental movements, but about [00:00:20] reinventing the whole thing.

[00:00:21] Veronica Morgan: To explore this, we're joined by Scott Bateman, a strategist and innovator who has led transformation across banking, insurance.

[00:00:29]

[00:01:07] Veronica: I guess today is Scott Bateman After heading [00:01:10] Australia's largest property management business, Scott launched property management platform column MEO to rethink the industry from the ground up.

[00:01:16] Veronica Morgan: In our conversation today, we wanna unpack what a truly [00:01:20] disruptive model could look like. Why so many agencies struggle to adapt to changes and what the next deck had might hold if property management dares to invent itself or reinvent [00:01:30] itself. Now, Scott, it's been. a long time coming this. We've had a lot of conversations off air and away from the podcast, so it's great to have you come on today.

[00:01:38] Veronica Morgan: Good to

[00:01:38] Veronica Morgan: see you.

[00:01:39] Scott Bateman: It is great to be [00:01:40] with you. Thank you.

[00:01:40] Chris Bates: Scott,

[00:01:41] Chris Bates: I mean, we want this episode not to be around pitching your technology, but more of a. discussion really around the challenges with the old [00:01:50] property management model, both from a customer's point of view, but also a tenant's point of view. I guess they're a customer as well, and why is that so outdated?

[00:01:57] Chris Bates: and where do you see the future of that going?

[00:01:59] Scott Bateman: let me answer it [00:02:00] this way. I think there's two parts. There's what's not working, which is one whole thing, and there's, of the many different ways that it could get solved, how do we think that it might and what does that mean? If we kind [00:02:10] of take a step back, there's two big issues here.

[00:02:12] Scott Bateman: One is most of the way that the property management side of the industry works was kind of shaped during a time in which people rented for a very short [00:02:20] period of time. Generally it was in between leading home and getting a mortgage, whatever the case might be. so we built this model where the people that were selling the homes, whether they meant to or not, ended [00:02:30] up managing the properties.

[00:02:31] Scott Bateman: Now, these are normally very different skill sets, cultures, processes, like they should be very separate businesses, but it's just kind of ended up [00:02:40] together. The problem with that is that now that the world is increasingly renting and renting for most of their lifetimes. Everything that is set up to support that isn't really in line with what people would expect [00:02:50] for a, multi-decade long relationship that we would normally expect for something like housing.

[00:02:55] Scott Bateman: if you look within the real estate businesses, property management often isn't particularly profitable as an [00:03:00] exercise to run sales is. So you've got this tension between the part of your business that generates most of your profitability versus the part of your business that at some point will be [00:03:10] worth something to sell.

[00:03:11] Scott Bateman: The property management is the long game. We sell the rent roll, but we don't really make money in the short term. And as a consequence, if you are a principal who's just worried about surviving, which many of them are, [00:03:20] and you say to them, I've got a dollar to invest in something to improve my business, where do I put it?

[00:03:24] Scott Bateman: Or more often it'll go into sales because sales is the thing. Paying the bills, day in, day out as they [00:03:30] try and navigate, the next sort of decade or so. So we've got this issue where people's expectations have changed and changed a lot. The nature of renting has changed and changed a lot.

[00:03:39] Scott Bateman: As a [00:03:40] consequence of this, we've got a model that's completely misaligned when we look at who serves those properties and what they've gotta do. When you go COVID and beyond, it's just got much, much worse. A third [00:03:50] or so of the industry left, we've seen enormous amounts of additions of regulation and legislation.

[00:03:55] Scott Bateman: So we've taken a model that wasn't working, pulled out a third of the people that were there to do [00:04:00] the job, added a hundred new parts of legislation, and then stood back and said, well. How's this thing gonna go? Unsurprisingly, not well. Then when you say, well, what does the future hold? And we're [00:04:10] looking at the advent of AI and, the different business models that we foresee, and it's a, it's a pretty kind of wild time in front of us.

[00:04:15] Veronica Morgan: I'm

[00:04:16] Veronica Morgan: really interested to see. What sort of wild time you think this could [00:04:20] be? I think I've mentioned on the podcast before I started a property management business last year I went into business with one of my original bosses when I first started in real estate 25 years ago. So Kate has [00:04:30] enormous experience in both running a business and also in running a property management business.

[00:04:35] Veronica Morgan: for me, not having been in it, but being in the industry, I was [00:04:40] so enthusiastic about the software that we were gonna be able to pick and choose and have this lovely automated end-to-end solution. And I can't tell you [00:04:50] how. Firstly shocked. I am at how that is not the case. because it's quite wildly known that there's lots of automations for certain pieces of the [00:05:00] process, but they just do not stitch together.

[00:05:02] Veronica Morgan: They do not talk to each, there is no integrated system. and so I was really amazed and astounded and very disappointed, I will have to say. 'cause I [00:05:10] was like all just gung ho about this. I would imagine tech has to be part of the solution, but it seems to be tech has been part of the problem as well, to be honest, because of this [00:05:20] Frankenstein that everybody has to have in terms of tech to get anything done.

[00:05:25] Veronica Morgan: so you've taken on the challenge of redesigning property management from scratch and you are a tech [00:05:30] platform, right? So I'm curious, What are you keeping, what are you gonna throw out and what fundamental changes are you planning for

[00:05:37] Veronica Morgan: in that?

[00:05:37] Scott Bateman: So we, we say very openly, [00:05:40] we didn't build Kolmeo because we. The world needs more property management software. It doesn't, there's stacks of it. the case that we were making is that at the time we were running the biggest property management [00:05:50] business in the country and there's north of a hundred million dollars invested in it.

[00:05:53] Scott Bateman: pretty significant asset. As we looked to the future, we just had no confidence. You could build a business [00:06:00] to really navigate that future using the tech that was in market. And we weren't seeing signs from those providers that they even had a clue where things could go. And as a consequence, the [00:06:10] roadmap was, uninspiring.

[00:06:11] Scott Bateman: So we didn't build it 'cause we thought we need software. We built it because we saw. The business model itself was changing and we felt innovation needed to move with the business [00:06:20] model. Not necessarily, make the pink button purple, or this takes four clicks, make it three. It's like how do you kind of reimagine the economics of real estate?

[00:06:28] Scott Bateman: And that's why we've built what we've [00:06:30] built. The challenge that you've spoken about, it's two kind of competing, schools of thought around 2008, 2010, as we all started to kind of fragment the experience into [00:06:40] multiple little isolated products. The biggest benefit that came from that is that each of those products on its own does a better job than one product end-to-end could ever do.

[00:06:49] Scott Bateman: [00:06:50] So if you've had a little Frankenstein of all these things, switching to a product that does it all end-to-end is actually worse at every one of those touch points in

[00:06:59] Veronica Morgan: Right? [00:07:00] Yep. Mm.

[00:07:01] Scott Bateman: but it's a bit more frictionless when you look at how the whole thing fits together. So we find when you show someone a product that is used to the Frankenstein mix and it's end to end, they'll say, yeah, [00:07:10] but I want these 12 features.

[00:07:11] Scott Bateman: When I do an inspection, I want these 16 features when I sign a document. And you might be saying, well, I've got, I can give you 10 of the first, and I can give you six of the second. So there's actually no [00:07:20] perfect solution. You've just gotta stand back and say, mindful of my objectives, which product does the most that matters and avoids the things that would, cause me the greatest frustration.

[00:07:29] Veronica Morgan: with the [00:07:30] model change we've. Property management, and obviously with a lot of experience. People leaving the industry sort of post COVID, when you've got a third of experienced [00:07:40] property managers going, you've got, and regulation and, compliance it's very onerous on property managers Every time there's new legislation.

[00:07:49] Veronica Morgan: I really do [00:07:50] not think that our governments take enough thought to who implements this stuff. But anyway, we do have,our rental commissioner from New South Wales coming on the podcast shortly. we're gonna talk about that because, [00:08:00] this is the thing that, that they're imposing a lot of this implementation on an industry that's depleted of staff and it's already.

[00:08:07] Veronica Morgan: Had the reputation of being a very thankless job [00:08:10] anyway, it's a tough job. You're in demand and it is always problems, just constant problems that you have to solve day in, day out. And people aren't always nice to you. it was [00:08:20] interesting too because through COVID people loved property managers 'cause they were handing out, they were handing out discounts, right?

[00:08:25] Veronica Morgan: But vacancies drop prices started rising. And of course they're assholes again. Everyone thinks they're [00:08:30] an asshole. So it's a very difficult. Industry to be in, to be quite frank. and I, I see a lot of the big players looking at ways to automate.

[00:08:39] Veronica Morgan: [00:08:40] And I guess scale some of the, what they see as low dollar productive tasks. One of them, for example, which I don't actually agree with, is a low dollar productive task [00:08:50] is inspections. there's outsourcing of inspections, which I think is actually terrible personally, but we can have another whole other conversation on that.

[00:08:59] Veronica Morgan: But that's just one [00:09:00] example of one of the, functions if you like, or one of the tasks. That a property manager has to do that. It hasn't gone to tech, can't go to tech. that [00:09:10] fragmentation or that sort of specialized, it's a bit like the Henry Ford model.

[00:09:12] Veronica Morgan: the way of building a car, isn't it? you just basically an assembly line of property management. So I'm starting to see a bit of that. I'm concerned [00:09:20] about that. 'cause I'm actually not sure that's a great solution. But is that sort of part of what you are seeing is the future?

[00:09:25] Veronica Morgan: That type of deconstruction, if you like, or industrialization of it?

[00:09:29] Scott Bateman: [00:09:30] Kind of, the way I would frame it is this, so let's start with your two options. You've got an investment property. Option one is you manage it yourself. Option two is user property manager. I would argue there [00:09:40] are self-managing landlords who do a very good job. No doubt.

[00:09:43] Scott Bateman: The majority do not. The majority that do it because they do, they wanna do things that the property manager would say, you cannot do [00:09:50] that. And we used to say this a lot. That's why people self-manage. there are across property management, a select group of property managers who are genuinely bad at their job [00:10:00] should not do it cause all sorts of issues.

[00:10:01] Scott Bateman: Overwhelming majority do a good job. There's a handful that do an extraordinary job and when you get that select view,as a tenant, great [00:10:10] experience as an owner. It's great experience. Our problem though is as an industry, on average, these people have a career of 11 months. So they come in, loan the job burnout, and don't just leave that employer, they the [00:10:20] industry within 11 months, at the moment, there's 4,000 vacant rolls on seek.

[00:10:23] Scott Bateman: If you look at average size of a portfolio to look after, this is somewhere between 25 and 30% of all properties [00:10:30] do not have a full-time property manager assigned to respond. And we cannot get them, train them, keep them in any way that meets the existing demand, let alone property number [00:10:40] growth. So part of what we're saying is two things.

[00:10:42] Scott Bateman: First of all, how do we take what the very best do and make that pretty consistent across the rest of the group? How do we normalize [00:10:50] that? These through really structured processes where the system guides you through what to do and separately, how do we start to deploy some of what we're seeing across things like agen ai, where we know the [00:11:00] AI can do the heavy lifting, bit more of the, repetitive tasks and so on, so that we create capacity and you don't need those 4,000 extra property managers that as an [00:11:10] industry we're crying out for.

[00:11:11] Scott Bateman: So I think there's no singular thing that is the issue or the thing to be solved. It's this kind of cacophony of issues that we've made worse through very [00:11:20] well intentioned, legislative changes that have just in many cases backfired spectacularly.

[00:11:25] Chris Bates: Scott hard really to build tech though, because like any tech, it's just costly, right? you know, [00:11:30] and I think there's been like, different. There was cubby, there was all these DIY platforms. Your bonds are, there was all these digital, either you do a DIY [00:11:40] or I'll build tech and I'll sell it to agents or property managers.

[00:11:43] Chris Bates: And either way it's a lot of capital to invest and, you've gotta get the payback right. And, How are you sort of [00:11:50] managing that? And I think is it getting cheaper to build it? where are we at?

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[00:11:53] Scott Bateman: there's a couple of issues here. One is that, if you look at the DIY, the self-managed landlord products, in large part, the [00:12:00] dilemma is that your competition is Microsoft Excel, and it's free.

[00:12:04] Veronica Morgan: Person who's decided to self-manage for whatever reason, has worked out that of the 30 grand they'll [00:12:10] earn in rent, they cannot believe they're gonna part with $1,500 for a professional to do it.

[00:12:14] Scott Bateman: So they say, you know what? I'm gonna use Excel. I'll do it myself. And you're trying to convince them to pay you [00:12:20] 20, $30 a month, which is not that much. a friend of mine, built one of these and I said, how's it going? And he said, what surprised us is that both the tenant and the owner could not get their head around the fact we are not their property [00:12:30] manager.

[00:12:30] Scott Bateman: They need to interact with each other. We're just their software. They have this huge admin overhead. B2C marketing, as you'd know, is expensive. And then trying to convince someone [00:12:40] to go from nothing, 240 bucks is a big leap. The other side is the agency side. I mean, I can only tell you we're $120 million in.

[00:12:48] Scott Bateman: It is not a cheap product to [00:12:50] build. It is not a,this is not a thing you come into and just place a small bet. You are either really committed to it or don't do it because these are huge, expensive and complex [00:13:00] platforms to build and build well,

[00:13:01] Chris Bates: So you, you'll spend 120 million on your tech

[00:13:04] Scott Bateman: correct.

[00:13:04] Chris Bates: and the payback. is it, how much market share do you have to start to pay this back?

[00:13:08] Scott Bateman: depends on how you monetize. I [00:13:10] mean, our kind of strategy is not that. So part of what we do is the subscription part of it is this services ecosystem.

[00:13:16] Scott Bateman: Where we help agencies actually monetize the rent rolls that they've [00:13:20] got through adjacent services and products of which we will share some of that income. So for us, we don't need to be the biggest down intention not to be a mass market product. We tend to focus [00:13:30] on the ultra large property management teams rather than, every franchise that exists.

[00:13:34] Scott Bateman: and we find we are very well suited to those groups where, you know, for the rest of the market, if you've got [00:13:40] 200 properties and you're mostly about sales. How advice normally is Stay with what you're on. Like it's just not worth changing. Why even change?

[00:13:47] Chris Bates: is that one of the major challenges though, is that like, you know, [00:13:50] life busy? I've got Netflix to watch tonight. I'm tired. I've got kids to get to school, and typically when that's what the property managers preyed on, right? If I don't service you, I'm just gonna play on your apathy a little bit in the [00:14:00] banking system, works that way as well.

[00:14:01] Chris Bates: and it is a pain in the ass. We've gotta get the key somewhere else. I've gotta get another inspection. it's a lot of complexity, Do you think that's just also holding the property management industry back [00:14:10] because, instead of having to. I guess increase.

[00:14:12] Chris Bates: they just try to let the rent roll sort of run off,

[00:14:14] Scott Bateman: there's a mix. So there's a range of factors. One of them is like when I was running a rent roll, we [00:14:20] had 23,000 properties when I left that business and every year we would lose 13%. A portion the landlord sells a

[00:14:28] Chris Bates: Yeah. Selling.

[00:14:29] Scott Bateman: cost, self [00:14:30] manage that is best in class. If you look at the data on publicly listed businesses, it's about twice that

[00:14:35] Scott Bateman: if you're starting every year having to grow by 13% to [00:14:40] 25% plus to tread water at zero, growth is very expensive. Parity is very expensive. So then if you think about these businesses that are growing and start adding [00:14:50] what that costs like, it's disproportionate. So you've gotta wrestle with this idea that your business, like a restaurant, your food deteriorates every day from the day you buy it.

[00:14:58] Scott Bateman: The rent roll is very similar, unless you are [00:15:00] constantly growing it, it's gonna shrink down just of its own volition.

[00:15:04] Veronica Morgan: It's such an interesting

[00:15:05] Veronica Morgan: insight actually into, the property management [00:15:10] business. And fundamentally there are a bunch of small businesses, so what you're dealing with is particularly when you've got tech, this sort of investment that you've made, even just choosing [00:15:20] solutions, you've gotta get somebody who's running a small business to wrap their head around the future, and the future of their business, but also, investing in a different way that you would [00:15:30] invest. Like you said, that we're all sort of hardwired to go short term anyway.

[00:15:33] Veronica Morgan: And if we think, okay, if we invest in the sales business and we can see an immediate return on that investment, that's what we are doing as opposed to, The second [00:15:40] marshmallow, if you remember the two marshmallow exercises of kids. do you think that is? Why the industry sort of resists deep change?

[00:15:46] Veronica Morgan: Because it really is a cottage industry, even when the pain [00:15:50] points are really so obvious to everybody involved.

[00:15:52] Scott Bateman: my observation if I compare property to my experience in financial services, property as an industry is terrible at change leadership, and I [00:16:00] mean, genuinely. Frighteningly bad, in large part because we don't have the large corporates that have had to develop that capability.

[00:16:08] Scott Bateman: When I first came in, I used to [00:16:10] say to people. Imagine in property if instead of having thousands of mom and dad franchises, we had a big four and those big four, like the big four banks, look at the [00:16:20] innovation you've seen over the last decade from big four banks in fraud detection and mobile apps and self-serve technologies and so on.

[00:16:27] Scott Bateman: We have seen nothing like that in property [00:16:30] because you don't have $4 billion organizations that can place big bets. The structure of the industry holds it back from innovation, and it also means they haven't had to develop a lot of these change [00:16:40] practices that we see elsewhere. We see it at the moment where we'll have agencies that see a demo of Kolmeo get very excited, sign up, and then literally every week for six months, it can be a [00:16:50] conversation that says.

[00:16:51] Scott Bateman: Guys, my key people are on leave. I can't do it this week. We've just had this new bit of legislation. I can't do it this week. We're about to buy this new rent roll. I can't do it this week. and in some cases, [00:17:00] these were customers that were convinced, which is the most important change for their business for the next 10 years, be 12 months of just life getting in the way.

[00:17:08] Scott Bateman: And because they're very small, they're very [00:17:10] sensitive to it. So the cottage thing doesn't help the complex nature of what they wrestle with. Also makes it really challenging.

[00:17:16] Chris Bates: Scott, can I, um, hit you? You might not have the data on this, so I'm [00:17:20] putting you on the spot. I've got a bit of a belief that, we're gonna start to see some pain down the line, particularly in our rental markets, just because the last five years has been a [00:17:30] restructuring, I think, of where investors have been buying versus where they typically bought in the past.

[00:17:35] Chris Bates: investors have been selling just due to interest rates, life, all the reasons. [00:17:40] Where they've been selling is not where the new investors are buying. So investors have been buying, you know, we have had a, a boom of investors, but often they're going to regional locations, obviously going to lower price points, [00:17:50] for many reasons.

[00:17:51] Chris Bates: not to say that I agree with it, and you can see investment booms in there and price booms. but that means that the investors that are selling aren't getting replaced. Like those property management,you [00:18:00] said they're losing 13%. You were best in class, but some are 25%. If those investors aren't getting replaced, we're gonna get an undersupply of rental stock.

[00:18:07] Chris Bates: It's getting tougher and tougher to rent Can you [00:18:10] see any type of data like that where, your regional offices are doing really well, your city offices and potentially are really, struggling, getting hired, losing a lot of properties?

[00:18:18] Scott Bateman: Very much so we do a bit of [00:18:20] work with some of the tenant advisory groups trying to work through, like how do we make the experience better and so on. And one of the comments that you'll hear from time to time that we kind of jump on the correct and if an [00:18:30] investor leaves the market and owner Occupy gets a home and it nets out.

[00:18:33] Scott Bateman: the evidence is that is simply not true, and it's not true quite a lot because household composition is

[00:18:38] Veronica Morgan: Mm-hmm. Yep.

[00:18:39] Scott Bateman: the [00:18:40] people that can afford to take that leap are not necessarily the at risk or vulnerable tenant groups and so on. So, yeah, short answer is yes. A lot of our customers for the last couple of years have been [00:18:50] resting with all sorts of challenge with landlord runoff just because they're exiting the market.

[00:18:53] Scott Bateman: Originally, particularly in Victoria, it was a reaction to legislative changes and land tax and so on. Other states [00:19:00] are, they've either followed or they're going to follow. So people are coming back to Vic a little bit, but they're not necessarily coming back to where they were and

[00:19:07] Veronica Morgan: No, they're buying d.

[00:19:08] Chris Bates: They're buying houses in the [00:19:10] suburbs versus apartments near the city. Right?

[00:19:11] Veronica Morgan: also they're,

[00:19:12] Veronica Morgan: they're buying at different price points. some of the properties that are being sold are sort of, know, more established areas, some bigger properties, and the new investors coming in aren't,[00:19:20] buying at the same price point.

[00:19:21] Scott Bateman: agree.

[00:19:21] Veronica Morgan: So

[00:19:22] Chris Bates: Yeah. Is only pockets. You've really seen some real issues there where you've. 'cause it was quite easy to rent in Melbourne, right? and I think that's, you know, like it was always easy to [00:19:30] rent a house, easy to rent an apartment. Rents didn't, prices didn't do much.

[00:19:33] Chris Bates: Rents didn't do much. But I think things have changed and I don't think we can go back to that world very easily because you need to replenish the [00:19:40] investors. And, you've got first home buyers often buying and the investors aren't buying so what are you seeing?

[00:19:45] Scott Bateman: so there's nothing I can give you that's geographically relevant. the data point that I think [00:19:50] is interesting though is that. Particularly through this kind of sharp increase in rental that we saw over the last couple of years, tenants are now so gun shy and so nervous about [00:20:00] changing properties.

[00:20:00] Scott Bateman: We're seeing the availability of stock diminish as a consequence. So we used to see 33% of properties turn over every year. It's now 22, so nearly [00:20:10] a third. Less properties coming through because tenants are staying put. We're seeing household composition increase as people room share and so on to deal with these higher [00:20:20] rents.

[00:20:20] Scott Bateman: so there just aren't the volume coming through if forgetting suppliers are total pool. So this interesting behavioral shift has happened that until tenants can get confidence again, that if [00:20:30] I vacate a property, I'm reasonably likely to find another one. They're just gonna stay where they are.

[00:20:34] Scott Bateman: So it's like the ones that are there aren't coming onto the market available.

[00:20:38] Veronica Morgan: And that impacts profitability

[00:20:39] Veronica Morgan: [00:20:40] of a property measurement business as well, because there's letting fees every time a new tenant turns over. not that it's really that great for landlords. I mean, we also, at the same time, we like to have consistency with [00:20:50] that. it's quite disruptive to, to have to find a new tenant.

[00:20:53] Veronica Morgan: But I guess if they're resign leases it, it, there's, uh, a letting fee. But yeah, even that, that churn, I guess. [00:21:00] Changes things in terms of managing a rent roll too, right? Or the lack of churn doesn't make it easier.

[00:21:06] Scott Bateman: Yeah, it's a, it's a, completely different problem to wrestle with, like the economics of your [00:21:10] business start to change. If you were earning, call it, a week or two weeks as a letting fee or whatever it may be so good for the landlord because obviously. Yields are stronger when you're just losing properties, vacant and so on.

[00:21:19] Scott Bateman: [00:21:20] but certainly very different for the agency. So you've got fewer staff. They're costing you 30 to 40% more. You've got, this, you know, turnover that used to happen in properties that's now longer [00:21:30] happening. Your staff are more prone to abuse and so on that you're trying to deal with. It's, it really is a perfect storm.

[00:21:35] Veronica Morgan: So

[00:21:36] Veronica Morgan: what role should and could technology plan [00:21:40] rebuilding this? Broken system. I mean, already said call me. Isis something, and I know from my discussions with you that you guys help those with say a thousand in the rent roll as opposed [00:21:50] to 200, 300, 400, I would imagine there's lots and lots of agencies with sub 500.

[00:21:55] Veronica Morgan: how can technology make a difference?

[00:21:57] Veronica Morgan: Can it.

[00:21:59] Scott Bateman: [00:22:00] It definitely can. so one of the, one of the interesting shifts, so if you look at how we solve these problems in all industries, we follow this kind of, these three steps. We do all things [00:22:10] ourselves and then we try and work out, hang on a minute, there are people we can use who are cheaper and what can we give to those people who are cheaper?

[00:22:16] Scott Bateman: And it's called outsourcing or offshoring. And then eventually [00:22:20] technology is created and it can do what the people do and it's even cheap. So we use the tech, we are somewhere between offshoring and technology right now. The interesting shifts though, is that when [00:22:30] a lot of the offshoring thing first started to take off, what you would see is that businesses would stand back and say, we manage 10 processes.

[00:22:37] Scott Bateman: Let's rank them in terms of what it costs us, [00:22:40] and then the ones that cost us the most, let's get that done offshore because we'll get the biggest bang for our buck. Our argument is that needs to shift, and instead what you've gotta stand back and say [00:22:50] is, of those 10 processes, let's rank them in terms of how impactful they are to our customer.

[00:22:54] Veronica Morgan: Yeah. Yep.

[00:22:55] Scott Bateman: ones that are most impactful, you keep onshore and the ones that don't matter so much, send [00:23:00] offshore. Yeah.

[00:23:00] Veronica Morgan: It's a little bit like, those businesses that are outsourcing their inspections, they're impactful, they're really impactful, but they would see those as being expensive and so therefore great to outsource to [00:23:10] a cheaper alternative. But at, I would say, at the expense of their client experience.

[00:23:15] Veronica Morgan: So that's interesting that, yeah. Sorry. Keep going. Interrupted.[00:23:20]

[00:23:20] Scott Bateman: So I think we're seeing the same thing with technology now. We're effectively the comment we make to people. Is when we look at the next two years, what we are forecasting with AI is [00:23:30] wild shifts in agency efficiency. And what I mean little bit, I mean orders of magnitude. the thing that I keep advising people though is think about technology as how things get done and think [00:23:40] about people as how you make people feel.

[00:23:41] Scott Bateman: So use the technology, get things done, and then stand back and say. What is the connection we need to have with our customer? What is the feeling that we want them to have? Are they feeling [00:23:50] confident and inspired and valued? And all of that? That is where you focus people. So stop trying to get people to do what the machines can do better and cheaper.

[00:23:58] Scott Bateman: Free them up to be more impactful and more [00:24:00] meaningful. And I'd argue that those people will have a more, rewarding career and experience and so on if they do that too. So we help solve some of that attrition issue.

[00:24:07] Chris Bates: Scott, from your, uh, around the grounds with, uh, [00:24:10] you know, you said you do these,work groups, I guess with some of your property managers, et cetera. I mean. On one of our properties, when I was away, actually, one of our toilets has only got a single flush right?[00:24:20]

[00:24:20] Chris Bates: And it's gotta be a double flush. Otherwise, I can't charge the tenant for, or they can't pay for the water. I'm like, they gave me a quote, it was like some 800 or $900, some [00:24:30] stupid price, to change this. And I'm like, how much water is that gonna save? And I like threw it into chat GPT. And this is gonna take a long time to get my 900 bucks back.

[00:24:38] Chris Bates: But I said, can I get the tenant just to [00:24:40] say they're not bothered? And then they asked the tenant and said we want to, do it compliantly. So that was extremely frustrating. Just felt like I was. There's no saving in water. There's a little bit of water saving, but the cost versus the [00:24:50] saving, and that's a lot of work for that property manager because for what?

[00:24:53] Chris Bates: and, you know, then they've gotta organize the plumber, the plumber's gotta go around, then they've gotta organize the tenant and, it's just inefficient [00:25:00] really. So what's some of the big ones that the property managers are getting really frustrated on, that it's maybe just a step too far that's creating a lot more work versus the benefit for anyone really.

[00:25:08] Scott Bateman: The one that we hear the most, [00:25:10] sort of frustration about is the changes around property compliance. and I think most property managers, because again, most property managers are renters, so they're not some group of monsters that [00:25:20] don't care about tenants. Most of them really do. They argue that the compliance changes are well-intentioned and, you know, important, but there is so much nuance in what makes [00:25:30] something compliant or not and how that gets achieved.

[00:25:32] Scott Bateman: I've forgotten the exact story, but I, I was sitting with, an industry panel and one of the property managers from a very large agency here was explaining the story where you just [00:25:40] watched the penny drop and a lot of people from government and so on just went. Oh God, yeah. There's no, there's no world in which this scenario works or makes sense and they're saying, yeah, but the [00:25:50] property's not compliant because of it.

[00:25:52] Scott Bateman: So because you haven't really done the work to understand what it means to implement these things, you've just gone with the rule. We end up worse off. The other one that [00:26:00] I was sharing with, is around the tenancy applications and the data that these applications capture. And a lot of the rights groups very appropriately are saying.

[00:26:08] Scott Bateman: We're capturing way too [00:26:10] much, personally identifiable data, which I agree with. And they're saying, we should give tenants all these options to not use these systems. And I said, that's fine, but I want you to stand back and actually see the world as it [00:26:20] is. If there are 50 tenants applying for a property on a Saturday, which is happening, and all 50 need to work out whether they are the one person who got it or the 49, who didn't, [00:26:30] they wanna know within a day or two so they can go to the next property.

[00:26:33] Scott Bateman: If you don't use these algorithms to assist with some of that selection and so on, it could be two weeks before a human [00:26:40] gets through all of the reference checking and so on to do it, and they'll say, yeah, but it's the issue of bias. And I, and again, I agree there's bias in the algorithm, but the world in which the person doesn't, [00:26:50] isn't free of bias, so that you've either got the bias of a.

[00:26:53] Scott Bateman: Mid twenties property manager or you've got an algorithm that we can actually control and, you know, dictate. I said, so like your [00:27:00] intentions, I agree with wholeheartedly. You've gotta understand how much worse this would make things for people if you try and see it through. and sadly that's just what happens is people [00:27:10] with great intentions produce terrible outcomes.

[00:27:12] Veronica Morgan: Yeah, it's a little bit

[00:27:13] Veronica Morgan: like the pet thing. For example. I mean, if you've got 10 applications, five applications, whatever, and [00:27:20] somebody has got four dogs and somebody else has got one dog, well, you're gonna go with the person with the one dog. Now you're not gonna say. You don't get it 'cause you've got four [00:27:30] dogs.

[00:27:30] Veronica Morgan: there'll be other reasons. But at the end of the day, this is again, the unintended consequences of making things, taking all choice away [00:27:40] from, owners is that there's still bias. it's a bit crazy. I mean, years and years and years ago in New South Wales, they made the pet, bond illegal.

[00:27:48] Veronica Morgan: And so the pet bond [00:27:50] actually made property managers more likely to present, a tenant who has pets favorably because they're saying, look, this person is so confident that their [00:28:00] dog or the cat or whatever's not gonna make to do damage, that they're prepared to pay additional bond.

[00:28:03] Veronica Morgan: Then they went that, that's not fair. They outlawed it, and then it's like that immediately put anybody with a pet at a [00:28:10] complete disadvantage against somebody without a pet.

[00:28:12] Scott Bateman: it's exactly the same with, background checks. So we've now banned any paid for background checks. In some states, it'll end up being the same [00:28:20] everywhere and again, well intentioned. What you don't realize is that, again, 50 people are at a property wanting to apply. Person who knows they are desperate for a home and they're [00:28:30] struggling, will come up and say, you need to know how much I want this property.

[00:28:33] Scott Bateman: Is there anything I can do to help the landlord understand I'm a good person, I'm gonna be a good tenant [00:28:40] because like I'm really wanting to stand out or show something different. Now if you are forcing people to pay for these products, I agree, terrible shouldn't be a thing. In some cases, that is the thing that [00:28:50] helps that person who wants to, who you know, present their case, stand out from the group.

[00:28:54] Scott Bateman: If you're an immigrant into Australia and you have no history, you are most disadvantaged by the inability [00:29:00] to now use these products.

[00:29:01] Veronica Morgan: Yep.

[00:29:02] Scott Bateman: very well intentioned, horrific outcomes.

[00:29:04] Speaker 2: I'm on a personal mission to help more people make better property decisions. You know, most people don't realize that they can [00:29:10] cost themselves hundreds of thousands of dollars over the medium to long term when they make property decisions without all of the information that they need. And what I do is help people with [00:29:20] tricky real estate problems, which offer masqueraders simple questions like, should I sell my investment property because the interest re payments are hurting, or should I buy before I sell?

[00:29:29] Speaker 2: Or the [00:29:30] other way around. You could connect with me and access all of the tools that I've created to help you make better property decisions at Veronica Morgan dot com au. And there you'll find [00:29:40] resources for first home buyers, details about my buyer's agent mentoring program. You could connect with my Sydney based property management and buyer's agency teams, Australia wide vendor advocacy.[00:29:50]

[00:29:50] Speaker 2: Or ask me for introduction to the small group of buyer agents that I would personally recommend across the country. That's Veronica Morgan dot com au. If you're considering a property moose, [00:30:00] which is buying your first time, upgrading, renovating, or investing, the team here at Alcove would love to help you think through your decision and get the finance right.

[00:30:08] Speaker 3: Please go to [00:30:10] cove.com au to reach out.

[00:30:12] Veronica Morgan: Oh, another one on immigrants is, I think it's Queensland they've outlawed paying more than a, is it a month in advance or something? quite often [00:30:20] someone from overseas will come and say, look, as a show of good faith, I'll give you three or six months rent in advance to demonstrate that I'm able to, you know, I'm good for the good for the money.They can't do that [00:30:30] anymore. So that type of. Potential tenant is really on the back foot. and I know that they're trying to say, well, they're taking, I guess they're trying to level the playing field for the person who can't afford [00:30:40] to put their nose in front like that. As a property manager, you don't really want six months in advance rent.

[00:30:45] Veronica Morgan: You don't really, you just rather than pay it that you know regularly. Right.Because then there's [00:30:50] a whole new set of challenges. There's all right, We gotta give a chunk of this to the landlord, but we still do need to withhold some because what if there's maintenance and bills and things that, that we're paying, you know, it actually [00:31:00] muck the system up.

[00:31:00] Veronica Morgan: So it's actually something you don't really want. so as an industry you go, yeah, great, sure outlaw it, but as a tenant, prospective tenant where that would [00:31:10] be their opportunity to put their best front forward because they're disadvantaged in other ways that's been removed. So, exactly.It's that lack of, the industry.

[00:31:18] Veronica Morgan: or just a little bit of a [00:31:20] commercial lacking perhaps in the, our legislators who don't fully understand the implications of what they're putting forward. But looking ahead though, do you see a future where property managers [00:31:30] are, you know, strategic advisors rather than administrators? if that's the case. It's that small handful that you were saying, uh, are excellent. [00:31:40] 'cause most would not be up to that challenge, so I guess, do you see the profession might disappear altogether instead? I mean, do you see a real shift in terms of what the role will [00:31:50] become?

[00:31:50] Scott Bateman: Definitely, yes. And if I look at, even just what we're building, the type of people that we are building a product for is shifting. So it's less about, like right [00:32:00] now you've got a property manager who does 10 things and you build software so they can do the 10 things. We're increasingly saying, we don't think you need to be doing most of those things.

[00:32:08] Scott Bateman: We need you [00:32:10] thinking about how you can add, value and have some impact on your customers through the more personable things. The separate thing is that you've gotta be capable of overseeing some of these technologies as they do their [00:32:20] work. we use the analogy of like the auto, the autopilot on a plane, right?

[00:32:23] Scott Bateman: Like 98% of the time that the plane kinda leaves the hangar and arrives back,it's not the pilot's in [00:32:30] control, but at the key moment, at the start, at the key moment, at the end they are, and at any point in between they can intervene because they're constantly aware of everything that's on. We see a [00:32:40] similar kind of shift transactionally, like how they do the work.

[00:32:43] Scott Bateman: But then importantly, it's more about what is that value add so that investor is thinking about, maximizing yield through [00:32:50] some bit of renovation or, how do we introduce you to people that might be able to give you some good advice on property number two or three or whatever it might be. So I think there's some of that stuff that is certainly gonna help [00:33:00] differentiate people.

[00:33:00] Scott Bateman: but you're right, very different job to what we've been doing historically.

[00:33:04] Chris Bates: Hit the start, which I hadn't actually really thought about. the sales and the property managers joined together, they're just doing that [00:33:10] because everyone lived in the property is not that long. And, really they would just use it as a, a lead tool to do a sale, et cetera.

[00:33:16] Chris Bates: And so it didn't get, and it was just an asset, but they wanna make money on the sales. [00:33:20] And, I've sort of got that bit, but the, shift in terms of living in properties longer and, and more of a sustainable actual business, you can get through building a rent roll. Do you see like [00:33:30] independent brands or do you think it's still because the real estate market is just a few big brands, often, the Magars, the Ray Whites, the bells, that have got such a foothold that it's [00:33:40] gonna be really hard for these independent property brands to really get any serious scale.

[00:33:45] Chris Bates: what do you

[00:33:45] Scott Bateman: You'd be surprised. We actually see the opposite. So the big franchisees [00:33:50] have the brand presence and the brand awareness. Generally speaking though, and this is a general statement, most of those franchisees are so disconnected from one another. That there's no [00:34:00] real economies of scale or competitive advantage because you are part of that group.

[00:34:05] Scott Bateman: what we see is, particularly in property management, the best businesses are [00:34:10] either purely property management. Or they would tell you they are at first property managers, second sales, Victoria, one of our, terrific customers is a group called Nelson Alexander. [00:34:20] They're the biggest property management company in the country.

[00:34:22] Scott Bateman: They're also an excellent sales business. But when you sit with their CEO, who will very seriously tell you, we are building a property management [00:34:30] business. That is also very good at sales. and I think that shift is an important one because the capability is different, the culture is different, economics are different, and so on.

[00:34:37] Scott Bateman: But if you get that right, you can build an [00:34:40] incredibly high performing and lucrative sales business at the same time.

[00:34:43] Veronica Morgan: Yeah, it's an interesting flip there because yeah, most do come at it from the sales side. years ago I was in the motor industry and it [00:34:50] was a bit the same, you know, there's this, the shiny selling, the, cars is a lot more glamorous and servicing them. Yet the service business is really what was the.

[00:34:58] Veronica Morgan: the asset in the [00:35:00] business, and actually in that instance, I mean, I was at Toyota, I think there was some rumor going around that most dealerships were making $200 every time they sold a Corolla. so really the profit was in the service [00:35:10] as well. so it's slightly different in that regard, but I do, in my own personal experience in my buyer's agency, when I have dealt with Property management businesses, those that have come [00:35:20] either were property management only, which is actually the reason that Kate and I decided to join forces and set up preferential was because, the property management focused business that we [00:35:30] had. Partnered with for a long time, sold and they sold to a franchise business which wanted to extend their sales reach.

[00:35:37] Veronica Morgan: So even their, purpose for buying property management was [00:35:40] still about sales. And you could tell, you know, we had clients immediately coming to us saying, ah, we need a new property manager. Who would you recommend? So it was instantaneous that the shift and same [00:35:50] staff, it just shows what leadership does

[00:35:52] Veronica Morgan: you know, I, I've known other businesses that had started. as a property management business and went into sales as a result of that, and their whole approach to property [00:36:00] management is much better in my experience as well. So it's interesting that you would say that.

[00:36:05] Veronica Morgan: what are you most looking forward to in terms of your business?

[00:36:08] Scott Bateman: I mean we started [00:36:10] this with this fundamental view that renting a property is broken. Came into real estate 'cause I was full of arrogance and thought that I could singularly fix it and everyone must be so [00:36:20] stupid and I'm so smart. got there and found I was completely wrong. They're brilliant people and they really do try hard.

[00:36:26] Scott Bateman: What we found is that this, commun means triangle, landlord, [00:36:30] tenant and property manager. Three sides have gotta be in balance, and when they're not, the whole thing falls apart. our kind of vision for the future is a world in which people actually enjoy renting and have a [00:36:40] bias towards renting for life because it's a great experience and you don't feel that sense of being a second class citizen because you can't afford a home.

[00:36:47] Scott Bateman: Saying others will do great work. In fixing home [00:36:50] ownership, what we wanna focus on is making the experience of renting a property a terrific one. And we know to do that, you've gotta have happy, engaged and high performing property managers, and you've gotta have a happy, [00:37:00] engaged landlord who's generating a good and consistent return.

[00:37:02] Scott Bateman: So in large part, what we do is just focus on how do we bring those three things together. Concurrently. and a lot of that has to do with both the [00:37:10] way we automate the stuff that kind of varies normally in terms of the service you get and then bring to life some really surprising kind of moments of delight through what we can do with data and prediction.[00:37:20]

[00:37:20] Scott Bateman: And there's a range of services that we're increasingly looking at bringing life to the tenancy so that it feels like this thing you rent is actually a really high value experience.

[00:37:28] Chris Bates: are you seeing issues though? Like [00:37:30] where, I, I get that sort of the tenant experience, et cetera, but I feel like the owner of properties is not gonna be as long as it potentially was. you know, you think about a lot of [00:37:40] the investors in the last five years, and they're not really buy and hold investors.

[00:37:43] Chris Bates: they're speculating on. pockets. And as soon as they can get their money, often there are a lot of [00:37:50] first time investors, there's, they'll probably take their money and run, particularly if there's any chance the price is going down. great.

[00:37:56] Chris Bates: I can rent something today and there's lots of 'em, and all of a sudden now all these investors are [00:38:00] selling rather than the buy and hold or had a house near the city and it was my old house and now I'm just gonna hold it because it's a good investment. it's a different mentality towards, and you know, there's not [00:38:10] built to rent and.

[00:38:11] Chris Bates: Institutional investing and you know, that that stuff's, that not, doesn't really move the needle really. I mean, there's 3 million plus rental properties and what they could build a hundred thousand of [00:38:20] those. it's such a minor element to it all. how do you think that's gonna play if the next version of investor is more a speculator, a market timer versus a long-term buy and hold?[00:38:30]

[00:38:30] Chris Bates: How are you gonna manage that, I guess?

[00:38:32] Scott Bateman: we can't control it. and this is the thing we've gotta accept, is that there are parts of this that we can influence very directly. There are parts of it that [00:38:40] we can influence less directly. IE the things that we do with and through property managers rather than direct the tenant or the owner through the agency's software.

[00:38:48] Scott Bateman: what we can't change is the [00:38:50] decisions investors are making about whether they, you know, hold or buy or sell or where they do and so on. We've just gotta make sure that. For those who do buy an investment property, if you are on our [00:39:00] platform, it is doing everything conceivably possible to make that a better experience for everybody.

[00:39:05] Scott Bateman: Part of my belief as well is that when we were sort of tracking all of the landlord data, you [00:39:10] would see that the landlords who had multiple properties were significantly better landlords for the tenants that rented those homes. They had capital on hand. They [00:39:20] understood what it meant to own and grow an asset.

[00:39:22] Scott Bateman: Highly responsive, understood what they could and can't do within legislation. Worked really closely with their property manager. What we see is [00:39:30] the, pardon the term, but the mom and dad that went and got some terrible bit of advice from their accountant that says, why aren't you negatively geared?

[00:39:37] Scott Bateman: Rates often buys a property. They've got no [00:39:40] understanding of their obligations, don't have the capital on hand. That's where a lot of those issues that we see start to flow through and show up. And then you've got this property manager being screamed at by a tenant for what the tenant is entitled [00:39:50] to screamed at from the owner because the owner shouldn't have that property if it does.

[00:39:54] Scott Bateman: Creates this mess on the other end. So I think some of them dropping out will be a very good thing. We've just gotta [00:40:00] make sure that the asset is sufficiently,profitable and incentivized or whatever it might be, that enough of the right people continue to buy and hold. So, I agree with you.

[00:40:09] Scott Bateman: The institutional thing [00:40:10] is a thing that it's just, it's, you know, a drop in the ocean compared to the majority.

[00:40:13] Scott Bateman: It's interesting though because I do wonder whether today's sort of multiple investment property owner has that same [00:40:20] mindset that perhaps the one that you are talking about would have, Maybe not. It's been a little while since we saw that, so perhaps

[00:40:26] Veronica Morgan: Yeah. Yeah. it's interesting out there. Yeah. [00:40:30] There's a real shift in how people are buying investment properties and their personal involvement in those decisions. and that's come about because of the proliferation of, borderless buyers agents and, great marketing.

[00:40:39] Veronica Morgan: [00:40:40] Basically, it's the new generation of the Spruikers that were sort of about 15 years ago. We sort of, that all died off as, became quite obvious that most people lost money. Now we've got a new [00:40:50] generation of it, but it's under the guise of advice and data driven and how can you go wrong using data to buy investment properties?

[00:40:56] Veronica Morgan: And there's gonna be some casualties, sadly and some [00:41:00] mass casualties and it's gets gonna impact, I would say a lot of regional property management businesses are gonna be impacted by that. But you know, we'll wait and see all that happen.

[00:41:08] Chris Bates: just to double down [00:41:10] on that, Veronica, I mean, we make a joke, you and I sometimes around, Inner scalability or un scalability or advise agency, you know, versus what I do broking, right? We have clients all over the country. [00:41:20] it doesn't really matter. We can use Zoom, it doesn't, you don't get a better rate.

[00:41:23] Chris Bates: there's no issue, right? But property managers, I dunno, it's a, that's gotta be the next level up. Open homes, [00:41:30] inspections, leaving,et cetera. How do they manage this? You know, when when you create more demand in one market, you can't just all of a sudden just, put a property manager on the ground, and then you, you know, you a [00:41:40] lot of investors leaving in this pocket and you've gotta reallocate them.

[00:41:42] Chris Bates: So it's a really hard business to scale, isn't it? the property management industry.

[00:41:46] Scott Bateman: It is, and it's why you don't see that many with scale. I think like when we were at [00:41:50] 23,000 at the time, we were the biggest that was and biggest that had ever been. And if you think about it, you're about

[00:41:56] Chris Bates: 1% of the market. Yeah.

[00:41:58] Scott Bateman: I think the next one down was about [00:42:00] 13,000. The next one, 10.

[00:42:02] Scott Bateman: There'd be maybe a hundred, 150 in the country that are more than 4,000. And it rapidly trails off until you hit [00:42:10] the hundreds So it's a, it's a frighteningly difficult industry when you look at the ability to scale. And it's a really important one to get economies of scale because of sensitive.

[00:42:18] Scott Bateman: The margins are.

[00:42:19] Veronica Morgan: Scott, you [00:42:20] said that when you first joined the industry, you had all these naive ideas around how you're gonna fix it. And it's funny, I was talking to Evan, Thornley, who we're gonna get back on soon, and he was saying the [00:42:30] same thing. He's now been in the industry 10 years. He said, oh, at the be at the beginning I was so sort of arrogant and, he came from Tech as, and he was like, oh no, I thought I had it all sorted out.

[00:42:38] Veronica Morgan: Then I realized it actually worked [00:42:40] completely differently and often when, and I've said this many times, the podcast, sometimes when I listen to the Prop Tech podcast and I hear interviews with people with great [00:42:50] ideas, but their personal story is to led them to develop this software or this solution.

[00:42:55] Veronica Morgan: And I think you do not understand the problem. You don't understand you. You've had an [00:43:00] experience, your mates have had an experience. You've all decided you can fix things and, but you do not understand the problem. A lot of it comes down to trust and they just assume that agents are untrustworthy and [00:43:10] so they're forgetting that buyers are untrustworthy.

[00:43:12] Veronica Morgan: Tenants are untrustworthy, vendors are untrustworthy. You know, landlords are untrustworthy. They just forget the whole ecosystem. So I'm, I'm guessing [00:43:20] you've come in and, you've had a rapid Sort of a shapeshift in terms of your attitude towards it as well. do you have an example maybe on that theme?

[00:43:28] Veronica Morgan: Do you have an example of a [00:43:30] property Dumbo for us that we can, a listen that we can all learn from?

[00:43:33] Scott Bateman: From one of my mistakes.

[00:43:35] Chris Bates: Whatever.

[00:43:36] Veronica Morgan: free to share

[00:43:37] Scott Bateman: God, there's so many. my whole attitude [00:43:40] was because I think I had become convinced that in getting a bad outcome as a tenant. I must have been dealing with someone who was either incompetent or didn't [00:43:50] care as the property manager. So you form this, view that property managers are monsters, I don't care or whatever.

[00:43:55] Scott Bateman: And it's not until I got to the industry and I'm meeting these people and they're all so lovely [00:44:00] and you hear them talk and deeply care about their landlord property and the tenant, and I'm sitting there just going. Shit, this just doesn't reconcile my perception. what the [00:44:10] hell am I missing? And it's not until you go on the road and spend a day with one or two of them and you're watching the horrible way they get spoken to.

[00:44:17] Scott Bateman: they're stalked, they're assaulted, they're [00:44:20] threatened. we forget all of this goes on. So I wouldn't say there's a, a specific instance I'd point to. I'd say there's a whole mindset shift. I had to make, to get rid of a lot of those [00:44:30] preconceived ideas about why, bad outcomes can happen from great people and great intentions.

[00:44:35] Scott Bateman: What you've gotta work on is, you know, what's the system they're working in, as an industry or with [00:44:40] tech, whatever it might be, rather than just assuming that it's a lack of effort or lack of competence. What,

[00:44:44] Veronica Morgan: Yeah, it's interesting that, isn't it? 'cause there is a lot of that sort of, oh my god, how hard can it be?

[00:44:49] Veronica Morgan: it's [00:44:50] very hard and I mean, I'm not even operational. My business partner, she looks after all of that and I'm a. Downed with the demands that are placed on them to manage.

[00:44:59] Veronica Morgan: They have to have [00:45:00] really amazing boundaries as well with people. forget the tag. just their, in their interpersonal, um, their communication skills just have to be. Rock solid. They have to be so [00:45:10] self-aware and, and,empathic. I mean, you and I were at a conference last week, Scott, and I think empathy was a big theme of that conference as being, a really important skill moving to the future.

[00:45:19] Veronica Morgan: But also it's [00:45:20] always been important. But let's face it, I think that the demands on that are becoming more and more. yeah, so it's interesting that you've had that shift. Scott, this has been a really interesting chat. It's, as I said [00:45:30] earlier on, it's been a long time coming. You and I have had a couple of interesting chats, usually at dinners or these things.

[00:45:35] Veronica Morgan: And I really appreciate your time.

[00:45:37] Scott Bateman: Very terrific saying you. Goodbye. Thank you having me on.

[00:45:39] Speaker 7: If you have a [00:45:40] question that you'd like us to answer in an upcoming q and a episode, you can send us a voicemail or written question via the website. The elephant in the room.com au. Or [00:45:50] you can email us directly at questions at the elephant in the room.com

[00:45:55] Speaker 7: au.

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