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Why real estate’s agent-centric broker models are doomed

By comparing the numbers of broker models, it becomes apparent that not only is one clearly more financially feasible, but could lead to a restoration of the nation’s faith in the industry.

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Agent-centric broker models are set up to lose and fail

Last October, I entered my 44th year as a licensed real estate agent, the last 36 of which have been as the designated broker and owner of the family’s real estate investment firm. I’m second generation. The date on my first license was barely 60 days past my 18th birthday. I aspired to be merely wet behind the ears. In those years – BA-C (Before Agent-Centric) – more business was done by less people in terms of transaction quantity than is dreamed of these days.

I was blessed (unknowingly) with the rarest of opportunities, starting from below the ground up in a hugely productive real estate company, family owned – read: Dad – and run on the Broker-Centric model. Below, the two models are defined through the lens of my experience on the inside of both.

Broker-Centric (BC) model defined

There are many factors, but the main thing is that the broker is in charge in every sense of the word. They produce the bulk of the leads, pay for them, and in many cases, design their in-house distribution. They pay for office space, and the various machines/computers necessary to do business. They don’t charge agents for much, if anything. They take virtually all of the financial risk and liability.

Commission splits in the BC model of yesteryear aren’t even believed by most modern day agents. Exclusive listings paid 20 percent of the listing side, while exclusive agency and open listings paid 15 and 10 percent respectively. The selling agent made 40 percent of the buyer side commission. There were variations of this, but the range of pay between companies was relatively narrow.

If looked at in terms of sales volume per agent, or GCI (gross commission income) if you will, the BC model requires significantly fewer agents than the Agent-Centric model requires. Adjusted for inflation, agents made more in terms of dollars than they do today at double or more the commission splits. For example, in a five year period from 1965 through 1969, just 25 to 30 full timers and eight to 12 part timers closed over 1,000 sides a year, every single year. I saw the last three in person, from the inside. The average full timer in that firm made more than twice the median household income. Twice.

Agent-Centric (AC) model defined

The AC model is, in my experience the perfect business model. That is, if you prefer the tail waggin’ the dog. It’s based upon the idea that all agents know what they’re doing and will use the time available efficiently and profitably, to their own benefit. Lead generation is typically left up to the agent.

The commission splits are typically 50 to 100 percent higher than agents toiling in a BC-based brokerage. It often requires two to five agents to equal the GCI produced by agents working under the BC model. There are exceptions, but most broker/owners employing the AC model use the mud on the wall principle. They pray that hiring the max number of agents they can house will produce the the bottom line profit they require to keep the doors open.

Brokers in the AC model often rely on newbie agents who begin with a 50 percent commission to make up for the more highly paid ‘experienced’ agents. Typically these rookies will do two or three deals in their first 6-12 months, then disappear, only to be replaced with the next rookie.

The irony of real estate teams working for an AC model firm

Note: There are kinda sorta hybrid models out there, the ones with various profit sharing and other agent-participant type models. Some are highly successful, but can’t (at least by me) be categorized as either BC or AC. I’ll leave thoughts on those outliers for others who are more informed about those models than I.

I have to believe that there are hundreds of brokerages out there who are more than a bit perplexed not only by the success of the teams they employ, but the bottom lines of the team owners. If, for example, we use the team model I ran for years, agents made a maximum of 50 percent commission split. Let’s compare that to John Doe Real Estate, a traditional company operating on the AC model, with around 50 agents. However, of those 50 agents, 10 of them, including Debbie, belong to a team owned by Debbie. Four are buyer-agents (BA), some are support staff, T/A, tech guy, team ‘manager’, etc. Debbie is a listing demon. This year, she’ll list 100 homes. Her team will close 250 sides. Fully 91 of her listings will sell and close escrow. The median price per closed side was $200,000.

The remaining 40 agents working for John’s firm closed another 280 sides, with all sides computed at three commission as a constant.

His agents make 80-90% commission splits. We’ll use an average of 80% if only to give John a fighting chance against Debbie (laugh track would be perfect here). Also, we’ll allow the median price on John’s other agent sales to be $220,000 a side, 10% higher than Debbie’s team. Let’s compare the two:

Outlining Debbie’s year:

On her 250 closed sides, here’s how Debbie did. She’s at a 90% commission split from John due to her phenomenal production.

So, 159 closed buyer sides at $200,000 median price = $954,000 GCI for the brokerage. $858,600 is Debbie’s ‘team’s’ share. Her BAs pocketed $429,300, which is an average income of six figures per BA.

Then, take 91 closed listing sides at $200,000 median price = $546,000 GCI for the brokerage. $491,400 is Debbie’s share. Debbie does all the listing and none of the selling. Furthermore, she doesn’t take referral fees from her own BAs when she gives them her own buyers.

Debbie’s take for the year after her team’s commissions are paid, comes out to $920,700. That’s before overhead of support staff, marketing, etc.

Outlining John’s year:

First, his take from Debbie’s efforts amounts to $95,400 from her buyer side transactions. Her closed listing sides netted him another $54,600. Total harvested from Debbie’s team = $150,000. But how about his other 40 agents? How did he do with them? Don’t forget, his other agents’ median closed side price was $220,000 – 10 percent higher than Debbie’s.

They closed 280 total sides. That’s a GCI of $1,848,000. John’s take from that GCI was $369,600.

Add to that his share of Debbie’s production – $150,000 – and John’s grand total comes to $519,600.

I want to tip this as much to John’s side of the table as possible, so we’re gonna assume he’s not part of a franchise operation. Therefore, he doesn’t have to shell out a percentage of every closed side to the franchise big guys. He does, however, pay for office space and the usual expenses that come with that. He has a marketing budget. With an office of 50 agents, he has a pretty sizable phone system and support staff – neither of which is free. Even if his operating expenses are the same percentage as Debbie’s (clearly a stretch to make a point) he grossed just a bit over 56 percent of what Debbie did.

The practical side

John gets a taste of 530 closed sides. Debbie gets a taste of just 47 percent of the total business done by John’s brokerage, 250 sides, yet almost doubles his gross income. Since most of John’s agents are lucky to last a year or two, he’s constantly spending time and money to replace them.

Debbie’s people? She has an impressively long waiting list to be a BA on her team. Think about it. Sure, they work very hard, but they show up looking professional, grab that day’s buyer leads, show property – follow up with the help of support staffand make six figures. Debbie’s operating expenses, as a percentage of GCI, are lower than John’s. Duh.

The numbers really get silly when the team is under the umbrella of a ‘100% commission’ AC office. I personally know of a couple of highly successful team owners working under that system, and it’s almost like being given the key to the broker’s bank vault.

What brokerages have done for 25 years

Does this explain some of what brokerages have been doing for 25 years? Though many have been called brilliant for their forays into related vendor ownership like title, lending, escrow, etc., they did that in self defense, for Heaven’s sake. If they hadn’t done that, most would have already been face down in the water, completely forgotten.

Then, there’s the 100% commission approach. I love this one, as it’s really the brokers conceding victory to the poor caliber of agents they’ve been hiring and overpaying for the last several decades. Is it any wonder they’re failing right and left with a model that promotes the hiring of woefully unqualified, unproductive agents who will be paid roughly the same as highly qualified and productive agents? As Dad loved to ask at this point, “What genius did the math on this one?” Indeed. At least when every agent is paying the broker/owner a monthly fee for their existence, the broker makes something.

The AC model is a loser from day one

The AC model is a loser from day one and always has been. I suspect it will continue to be so. But there’s another major reason, aside from the math, that doomed the AC model before it started – the AC model violates the real life Risk vs. Reward reality.

I’ll give you a choice of two ways to go as a new agent.

  1. In one, you get paid 80% commission on every dollar you produce. The brokerage takes virtually all of the liability, pays all the major overhead, and provides you with a suitable office atmosphere in which to work. For the most part, you’re responsible for generating your own business. Not much, usually nothing, is handed to you in terms of business. You close business based upon your own efforts, or else you starve. Of course, you look at that $220,000 median price at three percent commission split 80/20 in your favor. Then, you say to yourself, “Self, there’s no way I won’t close less than 20 sides in a year. That’s $105,600 — I’m in!!”
  2. In the other scenario, you get paid 40 to 50 percent commission. You must follow strictly written protocols, do the same thing every day, be a BA, and make just 50% commission. The thing is that your buddy down the hall, the one who works as one of Debbie’s BAs, made that much and wasn’t expected to generate any business whatsoever on his own. Hmm. What to do?

Then there’s the disturbing fact that the typical agent makes only $30-something thousand per year on their own. But you’re not like those agents, right? No-sirree-Bob, you’re three times that good. Since these brokers are willing to take virtually all of the business risk, yet pay me at least 80% commission, why wouldn’t I wanna go for it? I get the best of both worlds — extraordinary pay without the commensurate risk.

And there’s the rub. 

Gravity wins every time it is challenged

When we jump off a very high place without a parachute, we’re gonna die. Gravity eventually wins every time it is challenged. The same with the physics of economics. Whenever the market produces a business model challenging the laws of risk/reward, it’s as doomed to a bad ending as the guy jumping off the cliff’s edge thinking he can flap his arms and fly.

Brokers and team owners/leaders are the ones taking the risks. They should be the ones reaping the lion’s share of the profits. When brokers as a group thought they could ignore the undefeated law of risk/reward, it was akin to jumping off the cliff while flapping their arms.

Most agents simply can’t generate enough real estate business to matter. That’s not my opinion, it’s my experience since 1969.

Wanna know how feeble the typical real estate agent is? In one of California’s best years since the end of WWII, I think it was 1977, the state’s turnover rate for real estate agents was more than 2/3. If that’s not a convincing indictment of the newly installed AC model, nothing is. If you had a pulse back then, you printed $100 bills. Yet two of every three agents were either out of the business or with another broker, hoping against hope that the change of address – and not them – would make the difference.

Once and for all, let’s run from the AC model. That one change in our industry would do more to restore the public’s faith in what we do than anything else I can think of. When the vast majority of real estate agents simply don’t produce the results for which the public hires them, it’s time to reject the model creating that reality.

Jeff Brown specializes in real estate investment for retirement, has practiced real estate for over 40 years and is a veteran of over 200 tax deferred exchanges, many multi-state. Brown is a second generation broker and works daily with the third generation. With CCIM training and decades of hands on experience, Brown's expertise is highly sought after, some of which he shares on his real estate investing blog.

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14 Comments

14 Comments

  1. Jonathan Dalton

    March 18, 2013 at 9:33 pm

    AC model doesn’t work at all. Unless you’re John Hall (which was around for 30-plus years before the merger), Realty One, Homesmart, etc. etc. etc.

    There are no absolutes either way. The most recent examples I can think of, and the ones which I know you have in mind, failed not so much because of the split or the broker- or agent-centric model but because of a lack of business planning and dedication to success.

    • Jeff Brown

      March 19, 2013 at 11:55 am

      I think the key stat in this discussion is the empirical evidence demonstrating that the BC model not only produces more closed transactions, but with significantly few agents. That allows the brokerage a much improved bottom line, and the public benefits from an improved level of expertise and professionalism.

      In the down times far more AC firms go down in flames than do the BC practitioners. This is evidenced in the higher percentage of teams using BC surviving vs in some cases, the companies for which they work.

    • JoeLoomer

      March 19, 2013 at 12:00 pm

      Jonathan, how much do you think culture played a role – if any?

  2. Kathy Howe

    March 18, 2013 at 9:54 pm

    Lani, I love the article. I’m watching one broker in my area who is new with his franchise and he’s “crushing it” as Michael McClure would say. He’s close to opening another office and… let’s just say, he ascribes to the BCentric model.

  3. Lee

    March 19, 2013 at 1:53 am

    A number of really good points here. A few thoughts of my own… The real losers with AC models are the consumers. With the BC model, brokers focused on the consumers as their customer and agent as “employee”, under the AC model their customer becomes the agent. Brokers must trim their expenses down so far to maintain profitability that they are forced to skimp on vital areas such as marketing and training. This could result in the consumer receiving poor advice and customer service, and limited market exposure. Also, sales people don’t make always the best business owners or leaders, but the AC model forces them to become a marketing expert, a tech expert, a team leader and an accountant. I also believe this compensation shift has kept the real estate industry behind the times in terms of technology, and innovation. Brokers/owners are the ones who should be focused on the big picture, and agents should be focused on selling and servicing their clients. The AG model removes from the broker the ability to invest in technology, and moreover the incentive to innovate at all. All that said, your numbers prove why this a very hard bell to un-ring.

  4. JoeLoomer

    March 19, 2013 at 7:46 am

    “Note: There are kinda sorta hybrid models out there, the ones with various profit sharing and other agent-participant type models. Some are highly successful, but can’t (at least by me) be categorized as either BC or AC.” – I assume KW falls in this arena in your thoughts, Jeff. I would say THIS would be the future model for Brokerages, not a return/resurgence of the BC model. After all, half a billion in profit share and #1 in agent count in the country has to count for something more than just being a hybrid out there. I believe the KW model works because the central theme to virtually all the training is “lead with revenue.”

    Navy Chief, Navy Pride

    • Jeff Brown

      March 19, 2013 at 11:46 am

      If I’m anything, Joe, it’s results oriented. KW is a hybrid, and their universally solid results speak for themselves. “Lead with revenue” — Let me write that one down. 🙂

  5. Dan Desmond

    March 19, 2013 at 11:12 am

    The bottom 80% of agents out produce the top 20% in sales and commissions to the broker. The industry thrives on turnover because the training and products is often a second income stream. The motivating “GURUS” need them to sell their services to and NAR and affiliates need the masses for dues and to sell services to. AC real estate is a circus.

  6. HelpUSell RealEstate

    March 19, 2013 at 2:46 pm

    Jeff, we couldn’t agree more. Help-U-Sell Real Estate’s business model has been broker-centric since the company’s founding in 1976. We believe that it’s the best real estate model because: 1) it’s more efficient;
    2) it creates agents who have had more transactions and, therefore, more experience which enables them to better serve buyers and sellers; 3) it’s more cost-effective; 4) it creates a more manageable workload for agents; 5) brand consistency is better controlled when one person (the broker) is in charge of
    all advertising and marketing. Most importantly for us, however, a broker-centric model enables our offices to offer consumers choices, ultimately saving the consumer money compared to the old-fashioned agent model. That model, while slowly fading away, seems to exist only to support the inefficiencies of that old business model. Great insight, Jeff. Thanks for sharing.

  7. Tim White

    March 20, 2013 at 2:49 pm

    “It’s almost like giving the keys to the broker’s bank vault…” So true, but that;s only half the story. If you factor in all the liability that flows to the broker (insurance deductables, attorney’s fees, Franchise, MLS and Board dues (in my state the broker is responsible for collecting fees and they’re on the hook for said fees if they can’t collect), etc., etc., it makes the idea of running an AC-centric operation even more absurd. Bottom line is that the broker in this model assumes the bottom rung on the ladder (Franchise first, then agent, and then bringing up the rear is the broker). It’s sado-masochistic–but a sad reality for most brokers.

    One other thing: The last time I sighted a true BC model on the east coast was pre-millenium. Can you site some examples of where these models still exist in the wild?

  8. JAMES HARRISON

    August 4, 2015 at 12:09 pm

    So, 2 years after this article, how is this model doing today in a HOT market?

    • Lani Rosales

      August 5, 2015 at 5:11 pm

      James, Lani here (I'm the Editor in Chief) – I've spoken with the author and he affirms that this original editorial stands true today, even in this market.

      Thanks for chiming in!

  9. Ryan Powell

    March 1, 2016 at 12:34 pm

    This article is one of the most comprehensive and thorough that I’ve read on the subject. Especially like the part where you describe most models as either “Agent Centric” or “Broker Centric.”

    However, 3 years later, now in 2016 it’s worth pointing out that there is actually a hybrid model I’m considering being a part of. 75-100% commission split in favor of agent, $129 monthly fee all inclusive (no transaction fees, software fees, vendor fees, insurance costs etc) plus buyer and seller leads on demand. Firm is called Mont Sky Real Estate in NYC … have included their recruitment site below.

    Best of luck and thanks for the article again.

  10. Pingback: Real Estate Agent Vs Insurance Broker | ToRealestate

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Opinion Editorials

Culture can be defined by what employees don’t say

(OPINION) What your employees say defines your business. What your employees don’t say defines your culture.

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Whether the boss realizes or not, employees – the folks who often manufacture, handle, and sell the products themselves – can see sides of the business that management could easily overlook, including potential risks and improvements. So how do you make sure your employees are speaking up? A new study by Harvard researcher Hemant KakkarSubra Tangirala reveals that when it comes to speaking up, your company culture is probably either encouraging or discouraging it.

Tangirala wanted to compare two theories as to why employees choose to stay quiet when they could share their worries or ideas with company management. The “personality perspective” presumes that shy, reticent employees simply don’t have the gumption to speak up; therefore, the way to get more perspective from your employees is to make a point to hire extroverted people.

Meanwhile, the “situational perspective” posits that the company culture may either be encouraging and even expecting employees to speak up or discouraging it by creating an environment wherein employees “fear suffering significant social costs by challenging their bosses.”

In order to test these two theories against one another, Tangirala surveyed nearly 300 employees and 35 supervisors at a Malaysian manufacturing plant. First, the survey measured each employee’s “approach orientation,” that is whether or not, all things being equal, they had a personality more inclined to speaking up or staying mum. Next, employees were asked whether they thought their input was expected, rewarded, or punished. Lastly, supervisors were asked to rank the employees as to how often they spoke up on the shop floor.

The survey showed that both personality and the work environment significantly influenced whether or not an employee would speak up – however, it also showed that environmental factors could “override” employees’ natural inclinations. In other words, if employees felt that they were expected or would be rewarded for speaking up, they would do so, even if they aren’t naturally garrulous. On the other hand, even the most outspoken employees would bite their tongues if they thought they would be punished for giving their opinion.

The study also identified two major areas wherein employees could be either encouraged or discouraged from sharing their perspective. First, employees can be encouraged to suggest improvements or innovations that will increase workplace safety and efficiency. Secondly, employees should be expected to speak up when they witness dangers or behaviors that could “compromise safety or operations.”

Although the study was limited, it seems to point towards the importance of creating a workplace culture wherein your employees are rewarded for speaking up. Doing so could potentially provide you with invaluable insights into how to improve your business – insights that can only come from the shop floor.

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Opinion Editorials

How to change your negative mindset into something of value

(EDITORIAL) Once you’re an expert, it’s easy to get caught in the know-it-all-trap, but expertise and cynicism age like fine wine, and can actually benefit you/others if communicated effectively.

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In conversation with our friend John Steinmetz, he shared some thoughts with me that have really stuck with us.

He has expanded on these thoughts for you below, in his own words, and we truly believe that any individual can benefit from this perspective:

Over the last few years I have realized a few things about myself. I used to be trouble, always the dissenting opinion, always had to be on the opposite side of everyone else.

Then, I started reading everything I could get my hands on dealing with “how to change your attitude,” “how to be a better team player,” etc.

Over the course of that time I realized something. I realized that there was nothing wrong with me, only something wrong with how I communicate.

Unfortunately, once someone sets the context of who you are, they will never see you as anything else. I was labeled a troublemaker by those who didn’t want to “rock the boat” and that was that.

In my readings of books and articles by some of the most prominent technical leaders, they all had something in common. Paraphrasing of course, they all said “you can’t innovate and change the world by doing the same thing as everyone else.” So, in actuality, it wasn’t me, it was my communication style. For that reason, you have to say it out loud – “I will make waves.”

Physics

There are two things I reference in physics about making waves.

  • “A ship moving over the surface of undisturbed water sets up waves emanating from the bow and stern of the ship.”
  • “The steady transmission of a localized disturbance through an elastic medium is common to many forms of wave motion.”

You need motion to create waves. How big were the waves when the internet was created? Facebook? Just think about the natural world and there are examples everywhere that follow the innovation pattern.

You see it in the slow evolution of DNA and then, BAM, mutations disrupt the natural order and profoundly impact that change.

Communication

Where I was going wrong was, ironically, the focus of my career which is now Data. For those who do not know me, I am a product director, primarily in the analytics and data space.

More simply: For the data generated or consumed by an organization, I build products and services that leverage that data to generate revenue, directly or indirectly through the effectiveness of the same.

I was making the mistake of arguing without data because “I knew everything.” Sound familiar?

Another ironic thing about what I do is that if you work with data long enough, you realize you know nothing. You have educated guesses based on data that, if applied, give you a greater chance of determining the next step in the path.

To bring this full circle, arguing without data is like not knowing how to swim. You make waves, go nowhere and eventually sink. But add data to your arguments and you create inertia in some direction and you move forward (or backward, we will get to this in a min).

So, how do you argue effectively?

First, make sure that you actually care about the subject. Don’t get involved or create discussions if you don’t care about the impact.

As a product manager, when I speak to engineering, one of my favorite questions is “Why do I care?” That one question alone can have the most impact on an organization. If I am told there are business reasons for a certain decision and I don’t agree with the decision, let’s argue it out. Wait, what? You want to argue?

So, back to communication and understanding. “Argue” is one of those words with a bad connotation. When quite simply it could be defined as giving reasons or citing evidence in support of an idea, action, or theory, typically with the aim of persuading others to share one’s view.

Words matter

As many times as I have persuaded others to my point of view, I have been persuaded to change mine.

That is where my biggest change has occurred.

I now come into these situations with an open mind and data. If someone has a persuasive argument, I’m sold. It is now about the decision, not me. No pride.

Moving forward or backward is still progress (failure IS an option).

The common thought is that you have to always be perfect and always be moving forward. “Failure is not an option.”

When I hear that, I laugh inside because I consider myself a master of controlled failure. I have had the pleasure to work in some larger, more tech savvy companies and they all used controlled experimentation to make better, faster decisions.

Making waves is a way of engaging the business to step out of their comfort zone and some of the most impactful decisions are born from dissenting opinions. There is nothing wrong with going with the flow but the occasional idea that goes against the mainstream opinion can be enough to create innovation and understand your business.

And it is okay to be wrong.

I am sure many of you have heard Thomas Edison’s take on the effort to create the first lightbulb. He learned so much more from the failures than he did from success.

”I didn’t fail. I just found 2,000 ways not to make a lightbulb; I only needed to find one way to make it work.” – Thomas Edison

It is important to test what you think will not work. Those small failures can be more insightful, especially when you are dealing with human behaviors. Humans are unpredictable at the individual level but groups of humans can be great tools for understanding.

Don’t be afraid

Turn your negative behavior into something of value. Follow these steps and you will benefit.

  1. Reset the context of your behavior (apologize for previous interactions, miscommunications) and for the love of all that is holy, be positive.
  2. State your intentions to move forward and turn interactions into safe places of discussion.
  3. Learn to communicate alternative opinions and engage in conversation.
  4. Listen to alternative opinions with an open mind.
  5. Always be sure to provide evidence to back up your thoughts and suggestions.
  6. Rock the boat. Talk to more people. Be happy.
  7. A special thank you to John Steinmetz for sharing these thoughts with The American Genius audience.

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Opinion Editorials

Why tech companies should embrace Artist Residency Programs

(EDITORIAL) With technology founders wiping themselves with money while also truly caring about culture and inclusion, they’re missing a huge opportunity by ignoring artist in residency programs. Even Amtrak does it – come on, y’all.

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There’s a ton of cash in the tech industry. Like, more money than your primate brain can process, like “get-the-country-out-of-debt” money – Scrooge McDuck swimming in gold levels of cash. That’s how profitable technology has become.

And we’re not just talking laptops and smartphones, either. All of those monthly subscriptions you’re not thinking about, the Hulu, Netflix, Microsoft Office, that extra storage for your MacBook or iPhone, that’s all got a name: Software as a Service (SaaS) and with major players like Apple and Disney upping their stakes in the game – this model ain’t going anywhere.

Our thermostats are connected to our iPhones, and our cars are plugged into a matrix that’s fed into the Internet. Everywhere you look, the tech industry is changing everything. Everyone has a smartphone, a tablet, and a laptop, or a television that’s Internet-enabled.

And for everything that’s connected to the Internet, someone’s making a buck.

According to CTA, the tech industry will make $398B this year, and The Big 5 – Google, Apple, Amazon, Microsoft, and Facebook are worth a combined three trillion dollars. What do these companies do with all of the cash?

These companies typically pay well. To hire the best, workers want a payday. That’s fine, everyone who bangs at their job should get their slice of the action. After that, companies invest in culture and hiring that next tier of top talent. But, after the company offsites in a wooded cabin, the multi-million-dollar research projects, and the fully covered healthcare are accounted for, there’s still dough to play with.

Let’s get creative.

A lot of the more prominent tech companies have established that giving back is critical to their mission. Teams do charity work, they fly to other countries to help build schools; all kinds of amazing wonderful things are happening thanks to some of the world’s biggest players.

But what if those same companies established a new precedent – What if they established artist in residency programs?

One of the greatest professional experiences of my life was working for Atlassian and traveling between the Austin, San Francisco, and Sydney offices. While I was there to write for them, I’m still a writer, I always worked on my stuff. I’ve written in cafés in North Beach after browsing City Lights books where Ginsburg stomped his feet. I’ve been in bookstores in Sydney, never taking for granted for a second that I was beyond lucky to have this chance; that experience opened up a world that money had prevented me from exploring.

Can you imagine being allowed to fly to another office to work in a different environment, just for a change of scenery? It’s staggering what a comprehensive program could do for the arts community. The money and infrastructure is there, and so long as companies continue their dedication to paying it forward, this should be an added flavor to that mission.

This might sound like a shocker, but most of your friends who pursue art for a living ain’t exactly making windfalls of cash.

Most artistic types are freelancers or have multiple side hustles – they wait tables, or slug away in the bars, they cut corners on life’s everyday expenses in pursuit of their art. Your average painter, cartoonist, writer, filmmaker, they’re all chasing the project that gives them a chance to make their art their living. The problem is, for most creatives, it’s a dog chases its tail kinda life and that tail ain’t getting any longer or tastier.

How would it work?

Companies should work with the Alliance of Artist Communities (AAC) and set up a residency program. The AAC had been setting up residencies across the country for years, so while this is a feel-good philanthropic endeavor, the organization knows every tax break and loophole out there.

And realistically, the AAC has to, considering the culture of treating the arts in our communities is seen more of a begrudging, “we should probably do this” offense rather than an important investment. Most artistic programs receive pennies on the dollar, and most creatives live hand to mouth in pursuit of their dreams, and for many tech founders, the story is relatable, only they’re masters at problem-solving. Creativity doesn’t have to be pen to paper and the outcome being a funny doodle of a dog riding a skateboard, the creative mind is our innate core, we’re programmed to search for inventive ways to solve problems.

We just turn it off as society deems creativity an expendable commodity.

Creativity shouldn’t be relegated as frivolity, but essential.

In the world of artistic residences, paying bills is an issue. So, many programs have to drum up funds, find donors, seek out worthwhile endowments, search for tax breaks. Many are non-for-profits because they need grants for just about everything.

But in tech, cash is there aplenty.

Instead of throwing a Christmas party with a $100K budget for each office around the world, that money could be better spent on social enrichment. I’ve worked in the tech world for the past six years, and I’ve seen a lot of wasteful spending. While I love a good massage chair experience, that money could have been spent elsewhere versus giving staff of over three hundred already fabulously well paid people fifteen minutes of “me time.”

For one year or whatever predetermined amount of time, a company would allow a creative in their city to “join the team.”

What’s that look like?

Allow someone to create in these offices that are more like adult Disney World with their free snacks, open collaboration, catered meals, and endless perks. Give an artist a space that was once a small meeting room and let them do their thing.

The culture aspect of a creative being dropped in the average technology environment would blow their minds – most tech companies strive for diversity and inclusivity, and this program would be a brushstroke in that palette of reasoning.

By giving the creative the chance to mix it up with people who think in code, in marketing campaigns or how to “disrupt the market,” the influence would be impactful: a developer might become a nature photographer, or maybe a mixed media artist helps the marketing team see a problem from a different point of view. If there are anything companies in tech suffer from, it’s a little too much inward focus.

Change everything with a pen stroke.

Some campuses are so big (Facebook, Apple to name just two), they could support two or three artists at a time.

Indeed, Atlassian, Oracle, Uber, Lyft, all have multiple offices around the world. Imagine an extroverted painter working in a common room, while people move to and from meetings, getting that flash of inspiration, even if minute.

That’s beautiful.

Maybe instead of continually talking about code depositories or the next sprint, people got hip to new books? Maybe an essayist learns how to use Trello to manage their weekly pitches or maybe even further, they learn about how agile principles work could make their processes more manageable?

And while this person is getting paid, maybe they’re earning more money than they’ve ever seen. What if someone who’s always worked minimum wage jobs were given an $80K gig to create? Sure, you’d need to coach them on saving up for when the program is over, but for that period, being restricted to the dollar menu wouldn’t be everyday life.

The results would be staggering. The average working artist has to grind while others are asleep, early in the morning or late at night, they find ways to communicate their feelings, but while still making sure rent is on time.

Companies could establish an annual open competition where artists of whatever designated mediums submit their work.

Maybe it’s film or painting, or gosh, even a writer. But for that year, the winner gets to attend the fun parties, the culture building events, but most importantly gets paid well for their residency.

If the competition is opened up beyond the borders of the company’s home base, that works, too. Most bigger companies have a few corporate apartments that are barely used. Giving someone a room wouldn’t be that big of a deal.

Artists could donate their skills to workshops, creative programming, even create art specifically for the space. Most offices anywhere could use a little freshening up, or at least an ongoing blog series, something.

As for the perception of “selling out” the artistic culture has changed, where it was once punk rock to keep everything as DIY as possible, most of us creatives are fighting against a sea of other talented people all of the time, the chance for exposure on a bigger level, but also being financially free is worth wearing a few corporate branded t-shirts. And honestly, tech companies generally aren’t as gross as the old school monoliths of the past, most of the executive boards are made up of actual people who started from the bottom.

As my friend Jason Saul of BirdNote once told me, “don’t think of it as ‘selling out’ we’re in a hip hop-driven culture, you’re blowing up.”

There are residency programs on farms, a recycling center in SF, in the woods, the Florida keys, Amtrak got into the residency game for a while, just as Padre Island in Texas, the national parks all have them, even the CERN large hadron collider has an artist in residence program.

To double-down even further, even The Mall of America, the place where you can buy a corn dog or visit one of five Victoria’s Secret stores (who needs that many panties?) or ride a rollercoaster, has an artist in residence program.

The artist is given $2500 for a week, plus a hotel room and are allowed to roam the mall 24/7. LaGuardia airport in New York rehabbed an old Hudson News and converted it into a kiosk to people watch and create, so why not the tech companies who purposely set up shop in buildings in the heart of downtowns across the world or amongst trees in sprawling acreage?

This is possible.

Who’s going to be first?

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