Heroes in Business - Austin Allison Co-founder and CEO of Pacaso $1Billion Valuation, founder DotLoop sold to Zillow

Episode Date: August 1, 2021

Secrets of Selling to Zillow and Making 2nd Home Ownership Dreams Come True. Austin Allison Co-founder and CEO of Pacaso $1Billion Valuation, founder DotLoop sold to Zillow is interviewed by David Cogan famous celebrity host of the Eliances Heroes Radio Show and founder of Eliances entrepreneur community broadcast on am fm radio, internet syndication. www.eliances.com

Up in the sky, look, it's captivating, it's energizing, it's Eliance's Heroes. Eliance's is the destination for entrepreneurs, investors, CEOs, inventors, leaders, celebrities, and startups, where our heroes in business align. Now, here's your host flying in, David Kogan, founder of Eliance's. That's right. Can you believe it? Here we are again. Now, I got to tell you, we have to congratulate everybody and our listeners and stuff because it's because of you now. We are close to 900 interviews. That's 900 interviews. And I really appreciate the feedback we continue to have. When I recently interviewed the former chairman of CBS Network TV.

So keep that feedback coming in. Make sure you check out the website for Eliancer.com for the interviews. And, of course, Eliancers.com to see the incredible things that are going on within the community because it is the only place where entrepreneurs align. Well, I'm really excited, really excited about our next guest. Check this out. He's the founder of Dotloop and he ends up selling it to Zillow. Now, if that wasn't enough, because most people would go, well, you know, it's pretty good. It had a huge hit and stuff. What do I do next? Well, he doesn't stop there because I've got with us on the show, Austin Allison. He is the co-founder and CEO of Picasso. Now, if you haven't heard that yet,

you definitely will. And obviously you're hearing that now. It is now a $1 billion valuation. So Austin, first take us back to, you created Dotloop. How did you end up selling it to Zillow? I mean, everybody in the world knows Zillow. Yeah, thanks for having me, David. So I started my career in real estate. I bought my first house when I was 17 years old, started selling real estate when I was 18. And as a real estate professional, I found the process to be cumbersome and inefficient. And that led to my first company, which was called Dotloop. And six or seven years later, we had an opportunity to join forces with Zillow. And we took that opportunity.

And it was one of the best things we ever did. Fantastic company. I stayed on there for about four years. And along the way, I had been thinking about second homes. And that's really what led to my current business, which is Picasso. Talk to me when the contract was signed. What was that feeling like? You know, it was it was both exciting and also a bit scary at the same time.

And it took a little while to adjust. When you build a business and become part of a team, the business and the team and the mission becomes sort of integral to who you are as a person. And it's definitely a bit of a change or a page turn to the next chapter, if you will, when you join forces with another company. But I think the most important thing is alignment around culture and values. And we were very aligned with the set of values and culture that defines Zillow. So it made the transition pretty smooth. So did you know what you were going to do next after you ended up selling it? Or did you have a plan? I mean, what was going through your mind? I didn't know exactly what I was going to do next, but I did have a plan. And my plan was to stay on at Zillow for four years and make sure that the transition was really successful for both Zillow and our team at

Dotloop. And then after that, I had planned to create a new company. And my belief around company creation is that you should always solve problems that you're really passionate about. So I wanted to be thoughtful and patient about determining what that next problem was that I was going to go solve. All right. So here you are now, your co-founder and CEO of Picasso. And again, you can be reached at pacaso.com or of course, we'll have it on our website, alliances.com. What was the essence to go ahead and start this company? So the idea first originated in my mind about eight years ago when my wife and I became second homeowners. Prior to that moment,

we were like most families who dreamed about owning a second home but could not afford one. And we scratched our pennies together and had enough for a down payment on a home. We bought this home. We had to actually rent the home out on Airbnb to pay the bills at the time, but it enriched our lives. I mean, that second home became a really integral part of who we are. We met new friends. We became part of the community and it just like took our lives to a whole new level of enrichment. And having experienced that firsthand, I wanted to make that possible for more people because I knew that many people dreamed of owning second homes, but most people aren't able to realize that dream. And one of the main reasons why second homes are so inaccessible is because they're so underutilized. 11 months per year, which makes it quite expensive, you know, on a sort of cost per night basis. And we wanted to change that. We wanted to empower people to right size their ownership and, and just buy the portion of the house that you actually plan to use.

This is pretty amazing. So explain to me us on our listeners and viewers again. So it's second homes and you could buy a fraction of the second home. So you own the home with how many other people do you own the home with? A maximum of seven other people. So the value proposition is pretty straightforward. It's own a luxury second home for one eighth the cost. And the way that the model works is analogous to if you and a small group of friends or family members decided that you wanted to buy a house together, you would organize the group, you'd form an LLC, you'd buy the property, and then you would all share access to the home throughout the year. Picasso works in the very same way, except for we

manage all the details. We design the home, we coordinate repairs and maintenance. So as an owner, you just show up and you get to own and enjoy your home without having to worry about the headaches. Now, some people may be saying, how is this different from the timeshare aspect? So can you educate us on that? Yeah, you bet. It's very different in a couple of ways. The first is the type of property. So timeshares tend to be commercial hotels, like big projects with hundreds of rooms and thousands of members of the hotel program. These are just residential single family homes. This is just a normal single family home in a normal neighborhood. The second big difference

though, is the type of ownership. So when you buy a commercial hotel timeshare, you're basically prepaying for the right to use time in that hotel room. And they're typically sold as weeks. With Picasso, you're buying real estate, not time. You're just one of a small group of people, a maximum of eight, but usually there's only about five or six families per home that own this home together. So it's real property ownership versus a right to use. That's amazing. And again, you're listening, watching me, David Kogan, host of the Alliance's Hero Show. You could reach us at E-L-I-A-N-C-E-S dot com.

Why? Because it is the only place where entrepreneurs align. And we have with us Austin Allison, co-founder and CEO of Picasso. We're talking a billion dollar valuation. He was also the founder of Dotloop, which he ended up selling to Zillow. And again, you can reach him at pacaso.com. All right. How did you build the world's fastest unicorn?

Everything starts with the team. So we were fortunate. So my co-founder was the co-founder and CEO of Zillow for a long time. His name is Spencer Raskoff. And I've learned in my career that the most powerful thing that you can do in life and in business is to surround yourself with great people. So Spencer and I had the privilege of working with a bunch of really amazing people in our prior companies, Dotloop and Zillow. And many of those people came to join us at Picasso. So that is by far the most important ingredient and the best thing that we did at Picasso. The second thing that I would add,

though, is that we're pursuing a really meaningful mission. At the end of the day, when you're building a company, a company that matters, the company is just sort of the vehicle to pursue and accomplish the mission that the company stands for. And in our case, Picasso has a really meaningful mission. We want to enrich people's lives. We want to empower more people to realize their dreams of second home ownership. And we want to do it in a socially and environmentally and fiscally responsible way, meaning empty homes are bad. Empty homes are bad for the economy. Empty homes are bad for the environment. Empty homes are bad for housing affordability. So what's really cool about this model is that we're solving the empty home problem, which is good for everybody, but doing it in such a way that we're

empowering a lot more people to realize their dreams of second home ownership. So who is the target market? Are these people that have multiple homes, first ones getting involved in having a second home? Maybe this is their third, fourth, fifth? So the majority of Picasso owners are first-time second homeowners. About 70% of people who are buying are first- second home owners. So that comprises most of it. But we do have some people that buy multiple Picassos or people who have owned second homes previously, but just couldn't justify owning 100% of something that they're only using 10% of the time, which is the common use case for a second homeowner. The other theme that I would describe for most of our owners is

that we see a lot of families, you know, people either with kids who are still in the house or kids who are out of the home. And I think one of the reasons why is because family is a really important part of the second home ownership experience, because at your second home, you know, as a family, you make memories, whether it's that that mountain that you ski down or that trail that you run on or that, you know, lake that you boat on on the weekends. All of those things are really special moments for families. So we do see a lot of families that that own Picasso's. This is amazing. You've had such a successful career. We want to know what are some of those secret ingredients that you could share with aspiring entrepreneurs? I mean, you

continue, you've made your mark, you continue to make your mark. I can only imagine what you're going to do next after this, but what are some of those secrets? Yeah, so I've got three secrets that I'll share and they're not that secret, but they're very important. First is surround yourself with great people. You know, it starts with your mentors and advisors and then your investors and then your employees. Whatever you can do to surround yourself with great people, do that because it pays a lot of dividends. The second thing that I would add is following your passion. I had a mentor of mine that once told me, Austin, whatever you do in life, just make sure you're following your passion. Don't worry about money or titles or anything like that.

Just figure it out what it is that you like to do and go work really hard at that and everything else will take care of itself. And that's what I've always done. And it's worked, you know, every single time. So I really recommend that people follow their passions. And then the third thing that I would say is just live in the moment. Enjoy the process. Like company building and life in general can be hard at times.

It's like a roller coaster. There's moments that feel very high and moments that feel very low, but it's that journey, that process, that struggle that happens every single day or every single month that you really need to embrace because that's that at the end of the day, when you're looking back and reflecting on life and on business, it's those moments that happen throughout the process that I think make it really special. Well, Austin, truly amazing what you're doing again and building the world's fastest unicorn. That in itself is truly making history. Austin, you've blended technology and real estate really to create the fastest unicorn company that you're helping and employing others,

providing the opportunity to get second home. Austin, co-founder and CEO of Picasso. You can reach him at picasso.com. That's P-A-C-S-O dot com. This has been David Kogel with the Alliance of Hero Show. And coming up next is Keith Ferrazzi, chairman of Ferrazzi Greenlight, New York Times number one bestselling author.