zero to one
Issue 67 - January 14th, 2021
Today, I want to share the story of how our company started and became what it is today with Pinnacle Realty Advisors.
Before starting this firm, I was working at a company called ZeroDown out in San Francisco running real estate operations for this company. I officially left ZeroDown in early 2020 and started tinkering and working on this new company. Read more about this company here: “Zerodown, valued at $150 million, plans to take on Zillow” - TechCrunch
When we started this new business we were going to focus on building a software platform for real estate brokerage firms and agents, and the company was called “DataTape”. With our early team, we started building some software tools and talking to early potential brokerage customers and old colleagues of mine in the business. After a few months going down this path, I realized over time that there was a much bigger opportunity to build an entirely new brokerage company itself. A lot of the firms we talked with in the early days shared stories of agent retention problems due to commission splits and the fierce competitiveness of the market in agent recruiting. They were hungry for software tools and services that could help with agent retention at their firms. Side note: the number 1 reason agents usually leave a firm is over commission splits being better at another firm, so they constantly move around firms.
I had always worked at pretty traditional “commission split” firms like Sotheby’s, The Collective (which I helped launched in Dallas), and then my last firm before ZeroDown was Compass after they acquired our firm in Dallas - The Collective.
I had never thought about launching an entirely new brokerage business model platform until these discussions sparked a new idea in my mind to build a fee-based brokerage business where the agents keep 100% of their commission BUT we still provide excellent service and incredible agent support just like the higher end firms in the residential real estate industry.
Over the Summer of 2020, we decided to pivot our entire business plan and started working on launching this brokerage business. If starting a business during the middle of a pandemic wasn’t crazy enough then pivoting the entire company after launching it was surely an insane way to start off on this journey, but we were highly convicted of this move being the way for our future success.
Timeline of events:
Early 2020: Sam leaves ZeroDown to launch new company and originally was called DataTape to build software for brokerage firms and agents
June 2020: we decide to pivot the company into a full-blown brokerage business model and start working on Archetape
August 2020: we launched Archetape in Louisiana with Randolph Smith joining our team to lead this market and serve as our Broker in Louisiana
Fall 2020: we launched Archetape in Texas
Summer 2021: we acquire another Texas-based brokerage firm called Pinnacle Realty Advisors and Broker Breakup and Brent Porter joins our team to serve as Chief Broker Officer - read more about this acquisition HERE on Yahoo! Finance
January 2022: we rebrand the entire firm to Pinnacle Realty Advisors to continue building our platform in Texas, Louisiana, and more states coming soon
Stats: we now have over 370 agents at the company, we are live in 2 states with Texas and Louisiana, and our company operates entirely in the cloud with employees in San Francisco, Austin, Dallas, and Shreveport.
We have accomplished a lot as a small but mighty team in a short amount of time, but we have a long way to go. Along the way on this journey, we also raised some venture capital money from Mucker Capital out of Los Angeles and we also have received investment from a small group of angel investors. We are incredibly thankful for their support on this journey, and we would not be here without them today.
“a new chapter”
Check out my most widely read Substack post yet from last week: at our brokerage firm we made a HUGE announcement last week announcing our rebrand from Archetape to Pinnacle Realty Advisors. We are PUMPED for the year ahead!
Newsworthy Links To Share
Farmland investing startup raises $40 million as venture capital keeps seeping out of Silicon Valley: AcreTrader, a tech company “in the middle of nowhere,” is building out an investment platform and geospatial analytics database for landowners. (Fortune) - my friend from Memphis is a co-founder of this company and I am super pumped for their team - congrats Garrott and AcreTrader squad - keep crushing it!
Surging Covid-19 Puts an End to Projected Return-to-Office Dates: the postponements have unnerved office landlords and small businesses that are being stretched thin by a dearth of demand in office districts. An average of only 28% of the workforce last week returned to the office in the 10 major cities monitored by Kastle Systems, a nationwide security company that monitors access-card swipes. That compares with more than 40% the first week in December. (WSJ)
Scooping up homes: A Bloomberg News analysis of more than 100,000 property records reveals that a few real estate companies, including Zillow, are flipping properties to some big names in global finance. Two out of 10 homes flipped by iBuyers last year went to investors and other institutional entities, a rate that doubles to four homes in some Sun Belt metros. (Bloomberg)
Millenium Tower, a San Francisco luxury condo tower, is now leaning 26 INCHES with tilt set to progress three inches a year after attempts to stabilize it made it WORSE. Just months earlier, this property was only leaning 22 inches. However, the 58-story, 645-foot tall building is now leaning 26 inches after stabilization work to help stop the sinking was halted because the removal of earth to add stabilizing piles was worsening its slant. (Daily Mail)
12% of First-Time Homebuyers Say Selling Crypto Helped Save for Down Payment, Up From 5% in 2019 (Redfin)
Facebook's Meta signs for Austin's tallest tower in downtown's largest lease to date. The multibillion-dollar company will soon have a new home at Sixth of Guadalupe, a 66-story tower slated to be completed by 2023. (More Info)
Loveseat, an Austin-based online furniture marketplace, reported raising a $7M equity round, raising the total raised by the company to $8.5M.
Residential real estate prices have reached unprecedented levels in some North Texas areas while supply continues to be extremely limited for home buyers. According to 2022 MetroTex President Taylor Walcik the vast separation between supply and demand could continue to slow the sales figures and flatten the price increases. “Sales prices probably aren’t going to come down drastically in 2022 but they could begin to flatten out”, said Walcik. “The supply shortage may cause prospective home buyers who don’t want to continue open bidding on properties to delay their home purchase to see if the pricing will flatten out and hopefully see more listings in the 2022 selling season this Spring and Summer.” (Metrotex)
Redfin to buy Bay Area mortgage lender for $135M: Seattle-based Redfin is acquiring the Bay Area mortgage lender Bay Equity Home Loans for $135 million in cash and stock. (SF Business Journal)