The Origin Story of CRE OneSource

Back to another episode of CRE – The Unspoken Truth. I’m Charlie Coppola with my father Craig. And today we’re going to tell the origin story of CRE OneSource. When I get asked this question, like, “Hey, how did you guys start the company?” I have two or three different answers depending on who I’m talking to and what’s relevant. But this is like the full, the unspoken truth, the raw answer of like how we started it. So I’m going to ask you to start it off, and I think this whole episode we’ll just go back and forth and kind of chronologically tell the story. But if you don’t mind, take us back to the beginning and start, you know, how did the company begin?

So, as you know, we have a family VC company called Habanero Ventures, and Habanero Ventures invests in startup companies. But Habano Ventures also invests in funds, and in 2019 and 2020 we invested in the REACH fund, which is a fund created by the National Association of Realtors, and they only invest in startups that are real estate related. And one of the companies they invested in, I can’t remember if it was ’19 or ’20, was this company called CRE Simple. And CRE Simple was founded by a lady named Laura Millichap, who’s a fantastic woman. And one year I went to San Francisco and met all of the companies in the fund and spent a couple days and got to know Laura a little bit, and then we stayed in touch.

And fast forward a couple years, she called and said, hey, we have raised, I believe, right at $7 million. We’ve raised $7 million, four years, and it looks like we’re going to take the company bankrupt. And it was not because she felt… it wasn’t because the company was doing poorly. It was because she was in the middle of a big divorce and her husband was running the company, and she was the founder, and it just got really messy with them. And she said, you ought to buy the company yourself. And so I kind of watched, I kind of thought about it, and just said no. And then she said, “Hey, this is literally going to auction, and it’s going to auction shortly, and you should make a bid on it.” And so I thought, “Okay, well, maybe we should do that.” But we were on our way as a family. You want to tell the story here?

Yeah.

You want to jump in here?

Yeah. Yeah. Yeah. Yeah. So I would add two things. One, Laura Millichap, last name Millichap, her father was Bill Millichap, right? So one of the founders of Marcus & Millichap, so she had the big name and network in the real estate world. And then two, I would say, yes, the bankruptcy auction, we were on our way to Cabo as a family, and the auction was at the exact same time as our flight. And so you were interested. I want to add too, you did maybe an hour of due diligence. I don’t know, maybe more, but not much.

None.

And so, but you were interested, and so you said, hey, to my brother-in-law Hayden, who’s a tech guy, he worked at Uber, he, you know, he’s a software guy, would you jump on this auction and bid for me? Here’s how much I’m willing to go up to, and, you know, let me know when we jump off the plane. Let’s jump on a call and see how it went.

Keep in mind this was right at the end of COVID. My brother-in-law had grown his hair out past his shoulders. He showed up to this bankruptcy auction on Zoom in a backward hat, no, you know, collared shirt, hair down to his shoulders. Everyone else was in suits and ties, and it was a full thing that he was just a fish out of water in. And ended up buying the company.

We won the bid.

Yeah.

And then we go, now what do we do? Yeah.

So we took a year.

You landed in… we landed in Cabo and said, “Hey, we have a company now. What do we do?” Right? So I remember spending time on that vacation doing the due diligence that we probably should have done before, talking to attorneys, looking at the tech, looking at the product, understanding the market. And that was an interesting vacation, sitting by the pool with our laptops, like, doing calls and some of that.

We had no idea. It was an asset purchase. So when they throw a bankruptcy, they throw everything out, all the investors, which included me as a REACH investor, and then now we owned all the technology. And so we talked to their technology people. We tried to keep them at the end. We couldn’t get them. We hired our own technology people. We spent a year under the CRE Simple name trying to sell, and at that time the software was for mortgage companies to process their mortgages throughout the entire system. And so we got this software that was written for four or five years. I mean, it was a very complex code.

Robust. Yeah.

Lots of stuff involved in it, and they were just rolling it out to the marketplace. They had an early version of it that they had made some money on.

Selling. They were kind of brokering deals with it.

But this new version that they spent a whole bunch of money on was to kind of put the whole process of a mortgage company in there. And we spent the first year and a million dollars trying to get that system to sell and to work. And we didn’t have one sale after a year, right? So we…

I think we had a couple small sales. But I made this joke the other day, and it’s a joke, but it’s also a sad reality: we had more recurring calendar invites than we did customers. And it’s like we were running around in a bunch of different directions, not making a lot of progress for that first year, and learning a lot, but inefficiently, I would say.

Yeah. So the real origin of CRE OneSource is after a year we said, look, we don’t know anything about mortgages, commercial mortgages. We know a lot about brokerage, because I’ve been doing it a long time. And if we’re going to stay in business, we liked the core team that we had put together. We laid off two of our engineers, and we went down to, I think we ended up just, there was four of us, right? Alex, you, me, and Sam.

Sam. Yep.

And we started over. Alex put together Deal View, the basic of Deal View, and we pivoted. And it was a 180 degree pivot.

And the pivot came from this, and you’re going to add to this part of the story too. So another version of the origin story is, what, 10 years ago you had built some version of Deal View in Excel spreadsheets, and I had helped either build it or add to it with Excel, because I was good at Excel at the time. And then we iterated it multiple years, and this was the early 2010s, mid-2010s, you know, 2015-ish. And you and your team were really using this Excel tracking thing to get a lot of value out of the data and the pipeline and all these different metrics on your guys’s business.

And so I think, you know, part of why we pivoted to Deal View, and why we pivoted to and did what we did, was, hey, this is a world we know way better, brokerage. It’s a process and a product that we’ve been running, you’ve been running with your team in spreadsheets, and that other brokers would get value out of doing themselves. And so the idea and the theory behind pivoting to Deal View was that, you know, we knew it. We figured we could be better doing that.

I really thought, for 20 years I kept thinking, all I ever know is what I’ve closed. All I could do is look backwards in a rearview mirror. And we had been trying, and you were very obviously helpful on this, we had been trying for a decade to get the windshield. We were trying to look forward, and that’s what Deal View is. It was like the ability for a broker, an individual, a team, or a company to kind of look and forecast out. I remember for decades the manager would come by and go, “Hey, what are you going to do next year?” And you just throw some number out of your ass.

And it was like, I really wanted to get in there, and we had a decade. We literally tracked it every month for a decade on Excel, and we were off. We came to a number of something like 32% that we were always constantly over. We would always have 32% less income than we thought we were going to get. And so when we went to Deal View, we were like, I know this, because I’ve been trying to create this. And we created it from scratch, and it’s been great.

It’s been great for our team. We use it every month. Everybody knows we track sourcing. We track who runs the deal. We track the team. We look at the windshield every month, what we’re forecasting, and it’s been super valuable for us, and we get such good feedback from it.

Yeah.

That was really the first product for us.

Yeah. And it was interesting, right? Pivoting to that, really building on this, was like really leaning into your expertise on the brokerage side, your history with the spreadsheet stuff. And then what happened when we turned it into a product, launched it, started to sell it, was, you know, for the first time in a year and a half or even close to two years, we were starting to get yeses, and, hey, I like that, and positive feedback. And okay, now I felt like that was the first time I felt like we were actually in the right direction. Which was fun after a long time of hitting our head against the wall.

Yeah, it was cool because we were getting closes.

Yeah. Yeah.

It wasn’t cool because the product needed work, which we’ve revamped it now a number of times.

Yeah.

And it also showed us the second piece, which was we needed the prospects. We needed the next step, because everybody wanted the windshield, but they were super frustrated with their systems.

Yeah.

In terms of their Excel spreadsheets or their Salesforce or whatever it was they had. So which is why we went to prospects. And then now, as we sit here, we knew then we had to go to Osbo, which we just launched.

And so now we’re enterprise. So now we can take a prospect that comes in the door. We could turn it into a deal, Deal View. And now we can book a deal on the back side of it. And so now we sit here, you and I talking about origins, but we’re four and a half years into this, and we’re now at a place where we feel really good. The company’s doing great, and we have really good products throughout the process.

One learning for me was, like, early days, especially early with Deal View, we leaned so heavily on you and your team and your network. And as we got more traction and more brokers using it and more signups and more feedback, and we got more into the market, there was a transition period where we were super dependent on you and your team for feedback and direction. And then we got way more market feedback. And I think that’s ultimately what led to the prospects and, you know, owe us back office, where we are now pretty much 100% driven by the market and the feedback we’re getting. And we have so many customers now that, you know, we’re able to take that in, and you still give us kind of that north star, that mountain in the horizon to aim for. But the feedback has been really helpful for us along the way.

I think you’re right. One of the early lessons was our team, what we were tracking, not everybody else wanted to track.

Yeah.

Like, we were super focused, because we have this big team and we have multiple layers within it, and what we found out, 90% of the brokers out there want something a lot simpler. So what we have at Deal View is layers and layers and layers. If you want to get really into your business, you can. But we had to make it so that if you don’t want to get really into your business, you could just do these five things and you got exactly what you want. So we’re happy, because we built it that way as a team. But 90% of our brokers never get into the weeds of it. But we do have this ability: if you really want to get into the weeds on Deal View, you can get in the weeds and you can really get some juicy stuff on your team, which is great for us because we want it. But most of the brokers are like, “No, this is what I want to know. I want to know how much I’m making and where I got my business from,” you know, kind of thing.

Yep. Yep. It’s been one of our biggest challenges, is building a software that is robust enough to do really cool things that people want and will pay for, but also simple so that people use it. And I’d say the word simple, simplicity, like, that is one of the biggest, if not the biggest, reason people sign up with us, is because it’s simple and something they can wrap their arms around and use. And so we as a company cannot ever lose that, right? We have to continue to build but not lose our simplicity.

And we’re built by brokers, right? We’re built by me and you.

Yeah. Yeah.

For brokers. Like, this is it. We’re not selling to residential brokers. This is for commercial brokers. And there’s been a real, you know, it warms us as we look through the new year. It really warms my heart to know that we’ve really found a niche with commercial brokers, and they like us.

Yeah. One of the last kind of things I want to talk about and touch on is, I have a presentation I do about our company, and there’s a part of it about, and we can visualize the graphic, where it’s like, hey, this is what my expectations are, and it’s just kind of a flat and uphill road. And then there’s like, but this is really what the reality is, and it’s like, you know, ups and downs and lakes and valleys and fire and dragons, whatever, all these obstacles in the way. And you know, I look at that from our story and I see the reality of that in a few different ways.

One, the product side. I mean, we tried this product, and then we built the first version of Deal View, and then we iterated Deal View, then we built this, then we built that, and the product has evolved so much over the years. The other way is, you know, the team. You know, in early, early days we had contractors, we had this person for a couple months, then we kind of had a team that we really like, you mentioned, then we had to let a few people go, then we were really small, then we grew the team up from there. And along the way there’s people that come and go, but you know, it’s been a four, five year commitment to building a great team, a great product, a great company. And you know, there’s, you know, scar tissue and battles along the way that make me proud, and I’m sure you too.

No, it’s been a great… it’s been a great learn. You always look back and say it’s a great learning experience, but it’s been a great experience, and one of the coolest things about it is the people that we get to work with.

Yeah.

We’ve run into, well, one, our team. I don’t know what we have now. How many do we have?

I think we’re close to 20 now. Yeah.

We have 20 great people. We’ve built a great team. But more importantly, the amount of brokers that we’ve met across the country, and the quality. You know, I knew I like being in our business because I like working with other brokers, but you get to now see, and we are not, you know, we’re not just the big companies. We’re working with these smaller companies, local boutique shops, and the amount of quality brokers that we’ve been able to meet and get to know. And then when they come to Phoenix or Scottsdale, they’ll come meet us. They’ll meet the team.

I’ll spend time with them. And that’s been one of the highlights that you would have never thought about, you know, when you start a company, like, hey, I’m going to get to meet another…

You know, thousand brokers, or, you know, 2,000 brokers, or whatever it is. You know, couple thousand. Yeah. And it’s like, these are quality people. So I really like it.

On a day-to-day basis, talking to brokers all day, every day, I mean, it’s entertaining. I mean, the brokers have stories. They’re fascinating people. They’re funny people. And so, you know, they’re big personalities. And so just stereotypically, or generally, right, brokers tend to be salespeople and gregarious and extroverts, and it makes it fun. I mean, our team, we have so many stories of, you know, talking to different people, and it’s so much fun, just, you know, as opposed to selling to, you know, the accountants or the HR or whatever it is. And no offense to those people, but it’s been fun doing demos and Zooms back to back with these types of people.

It’s way more fun closing deals than it is the first year, when we…

For sure.

You know, we had a couple sales guys. Drew Berline, I don’t know, he did 240 demos without a close.

Yeah.

I mean, we’re still friends with Drew, but man, boy, that was a tough year for Drew and for us. And…

Yep.

And we value Cody Johnson and Drew Berlin, who are our sales guys at the time. Two top-notch individuals who just, we just didn’t have it right. We just missed the mark.

That’s been, I think, one of your learnings too, is in brokerage you sell yourself, you sell a service. With us, we had to sell a product. So we were, yes, we were selling ourselves and our team, but also a product, and all three of those have to be great to get the sale and to keep the customer. And that was, I think you’ve said it before, that was a learning for you, and I didn’t know any better, you know. So, learning for me for sure.

Huge.

Yeah.

It was fun.

Yeah.

Fun to be here.

Multiple origin stories. That’s the raw, unfiltered one. Cabo, auctions, online Zoom, brother-in-law. And, you know, a little bit of, I say, wandering around alone in the dark for that first year trying to figure it out, and then finally getting a little bit of traction. And you said it, way more fun the last year or two or three as we’ve gotten more traction.

It’s all good.

Awesome. Awesome. Thanks so much. Take care.