Pacaso scales into new markets by partnering with local real estate agents, cleaners, and property managers, then investing heavily in back-office technology to coordinate vendors and manage budgets. The company builds systems ahead of demand, accepting operational chaos as part of rapid growth.
Chapters
You mentioned earlier, as far as, you know, the markets that you operate in, and it sounds like, you know, Picasso was a somewhat operationally complex marketplace. So, you know, what all goes into launching new markets?
It is a pretty complex business. This is probably our greatest curse, but also our greatest blessing. You know how, like with people, oftentimes certain people you know, me included, have personality traits that are their greatest asset and their greatest liability at the same time. And I found that the same is kind of true of companies. Like our business is super hard, but it's not rocket science. You know, like anybody could go buy a home with 3 other people, but it's super hard, you know? So all that complexity translates into a lot of moat for us that gets bigger and wider as time goes on. But one of the things that we've done to set up our business to make it a little bit easier to scale than it would be if we were trying to do it all on our own is we try to partner with other people. So an example of this would be real estate agents, you know, as opposed to hiring, you know, hundreds of salespeople or thousands of salespeople, We tried to design our model in such a way that it fits really nicely into the toolkit for existing real estate agents. Like if you're a real estate agent in, I live in Napa Valley, so I'll use Napa as the example. If you're a real estate agent in Napa Valley, a good one, you probably have a data, you should have a database of people who are interested in buying homes in Napa Valley. And Most of those people in your database are what I would describe as window shoppers, people who are going to just continue to dream and dream and dream about buying a home in Napa Valley, but will never transact either because, you know, they can't afford to buy the home that they want or they can't justify buying the home that's going to sit empty for 90% of the time. Picasso is now a tool that agents have in their toolkit to convert those window shoppers into home buyers. So that's one example of a partnership that's really important to our business model as we scale into new markets. But we have other examples of partners like that, you know, cleaning companies, property management companies. We do most of our interior design and stuff in-house, but, you know, occasionally if it's like a really new market or a unique market, sometimes we'll partner with local designers. So that's a big part of scaling up. The other big part of it is we invest really heavily in systems and kind of what I would, what I think most people would consider like back office technologies that aren't very like visible or sexy on the front end to manage all these properties and pay all the bills and coordinate all the vendors and hold third parties accountable. Budgeting and accruals for, you know, future expenses that whether it's a furnace that'll need to be replaced or a roof that needs to be replaced, like there's a lot of technology working behind the scenes to help us scale that. And we're trying to just build way ahead of the anticipated scale. But it's a constant struggle, you know, like all companies, it's a constant struggle. You know, we always feel like we're playing catch up. It always feels a little bit chaotic. But yeah, I met a guy, I guess it was probably like 7 or 8 years ago now that I was interviewing as for a COO position. And he was a, you know, really successful COO that had been a COO at a couple of big unicorns. And he was way more qualified than I was going to be able to attract at that point in time. So he was pretty much just doing me a favor to have the meeting with me. But I remember we were talking about all the chaos of company building and scaling. And he told me, he's like, you know what? Like, I remember when I was earlier in my career, it used to always feel like chaos inside of every company that I was ever at. Doesn't matter how successful the company was, how big it got. It always felt like chaos inside. And what I've come to realize after, you know, X number of years doing this is that that's just what it feels like. And that's why we do what we do. That's why we all have jobs. You know, if it wasn't hard and there wasn't, you know, chaos, technology would be doing all the work for us. But there's a lot to this. It is very hard. And scaling is a struggle. But I guess we just try to use tech to scale ahead of it.
