Of all the startups that we see, and we see quite a bit, it is usually the ones built on a simple idea that prove to be the most successful. Just have a look at the top ten or so entries on our Top Tech Startups list. You’ve got Codecademy: a simple and free way to learn how to code; Ouya : an open-source gaming console; Visual.ly: an infographic sharing network; Duolingo: a free language learning platform.
If the success of a startup depended only upon its simplicity, CompStak would be one of, if not the, most successful in history. CompStak allows real estate professionals – brokers, appraisers, researchers, etc. – to exchange information about comparable commercial real estate transactions, or comps. “They [real estate professionals] are already doing this,” Danny Shachar – CompStak’s Director of Operations and Marketing – told me, “they’ve been doing this for years. If you are a broker and you completed a deal, you would share that with your network.” While exchanging comps is common practice within commercial real estate, the process is horribly inefficient. Comps, prior to the launch of CompStak, were not published or made publicly available anywhere. Real estate professions generally had to rely on their personal network to find these comps.
CompStak was born out of CEO Michael Mandel’s frustration with the status quo. Working as a real estate professional, Mandel would spend countless hours searching for comps. More often than not this search would prove to be a fruitless endeavor. Completely dissatisfied with the de facto comp exchange system, he decided to build a central hub that could house and exchange this comp information.
CompStak facilitates the open exchange of these transaction comps. The approach to this is quite unique: CompStak employs a crowdsourcing type model, requiring real estate professionals to submit details of a transaction before gaining access to the more detailed data. Further, before a real estate professional can even browse the database, he or she is put through an extensive vetting process. Simple enough.
The traction and adoption of CompStak has been quite remarkable. While refining the process and technology, the company was able to gather and compile detailed information from every single commercial real estate transaction in New York City for 2012, all in a matter of months. However, as Danny told me, San Francisco serves as a much better example of the speed at which this data can be compiled. “In New York we were really testing it out for the first time, and it took several months to gather all that data.” Danny said, “But in San Francisco, we able to actually gather data in a matter of weeks.”
What’s more, the CompStak team built their own database to house all of this detailed information. The proprietary database and software is quite complex, and is able to handle dozens to hundreds of comps a day in many different formats. Further, it is able to flag comps that are either a duplicate record or inconsistent with the records of nearby transactions.
The simplicity and the utility of CompStak really stands out. Although real estate comps is a relatively – compared to, say, mobile apps – small niche market, the execution and the value of the product is quite remarkable. Often, startups try to solve absurd problems that don’t really exist: “Pinterest for animal tamers” or “Airbnb for Pre-Teens” or “Crowdsourced baby names.” CompStak, however, takes on a problem that is very real. The value of their approach is displayed in the rapid adoption of the system within the real estate industry.