Pacaso's founder bought a Lake Tahoe second home in 2013 and noticed they sit empty most of the year, averaging just five weeks of use. He spent 2019 researching the market, then launched Pacaso in early 2020 with Spencer, a former Zillow colleague, to let multiple people co-own properties and actually use them.
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You know, what was the founding story for Pacaso? And then, you know, maybe what were some of the first steps that you took to actually start it as a marketplace?
So the Pacaso idea was born in 2013, so 11 years ago now, when my wife and I purchased a second home in Lake Tahoe. As I mentioned before, I started out, you know, dead broke, but fortunately, thanks to Dotloop and later, you know, in 2015, Zillow, I was able to have enough capital to be able to afford a second home. And this second home just changed our lives, like in a huge, huge way. It turns out when you buy a second home, you're not just buying a piece of real estate, you're buying a second group of friends, a second community, a second life in many ways. And for me and for most of our customers, the second home is even more impactful than their primary home. And that may sound like a really kind of absurd statement, and I'm careful about where I say that because I realize it may come off as tone deaf in front of the wrong audience. But the reason why I say it with confidence is because the primary home is so much about utility. The primary home is like where we do laundry, you know, where we cook breakfast, you know, it's like where we sleep. The second home, is really about finding a happy place, like being the best version of yourself. Like when I'm at my Picasso home, when our customers are at our Picasso home, they're better parents, you know, better friends, you know, they have more time to pursue their hobbies. Like it really creates this special place for you to be the best version of yourself. So I experienced that firsthand in 2013. I was blown away by it. And I became really inspired to try to find a way to make that possible for more people because second homes are super expensive and out of reach. They're just, you know, they're hard to buy. The second thing that I learned though about second homes is that they're highly underutilized. The average second home is only utilized 5 weeks per year, and there's roughly 9 million second homes in the US. Only like, you know, a million and a half, a million to a million and a half of them are rented out in some capacity. So most of these homes are just sitting empty and not even being rented at all. It's like such a waste of resources. And empty second homes create a bunch of other problems for communities. They drive up home prices because it constrains the market of having supply. Empty second homes starve local businesses because in places like you know, Tahoe or Napa or Aspen, you know, during the shoulder season, there aren't owners in the home using the services year round. So there's all these problems that come from empty second homes, and second homes are unaffordable. So it was really those 2 insights that I learned in 2013 that inspired this idea for Pacaso, which was basically like, what if we could find a way to make better use of all these second homes? and enable people to right-size their ownership to buy what they actually need. And that's how this whole idea of co-ownership was born. But I didn't pursue it until 2020 because I was working at Zillow, you know, all the way through the end of 2018. And I decided to take a year off before starting Pacaso. And right before I took my year off, I remember reading this quote that was attributed to Einstein that said, if you had 60 minutes to save the world, you should spend 55 minutes understanding the problem and only 5 minutes on the solution. And that was like the opposite of how I started Dotloop. Dotloop, I didn't know anything and I just like started working on the solution before I even understood the problem and, you know, made a lot of mistakes along the way as a result. So that quote really resonated with me and I said, you know what, I'm going to dedicate this year off, which was 2019, To be in the 55 minutes. And I'm not going to work on, you know, any business creation or any solutions, but I'm going to really understand this problem. And that's what I did. So I spent a lot of time just kind of understanding the models that had come before us, talking to customers. I knew that I wanted to work with Spencer. He knew that he wanted to work with me. We both kind of left Zillow around the same time. And we kind of settled on this idea, you know, for Picasso, and we ended up starting the company in early 2020.
