Crowd-sourcing and Efficiency in Real Estate: The Success of Compstak
By: Evan Axelrod- TAMID at YU
On Monday night, February 6th TAMID members at Yeshiva University had the amazing opportunity to hear from Michael Mandel, CEO of CompStak, a real estate technology startup, in a fireside chat with the President of TAMID at YU, Yael Jakobov. The conversation began with Michael detailing his background as a real estate broker and how he recognized a segment of the real estate business that was begging for entrepreneurial disruption. Using his background in Entrepreneurship from Babson College, Michael took initiative and is now in the process of improving the efficiency of how lease agreements are analyzed in commercial real estate markets all over the United States.
Michael’s company, CompStak, is striving to bring transparency to the commercial real estate market by providing a database of hard to find lease details for commercial real estate investors. Before CompStak, brokers held weekly meetings to discuss recent deals and the numbers associated with those deals, otherwise known as comps. The comps that were discussed were for various different client types. Michael found discussing all lease agreements to be a waste of time especially when he was looking for a lease for a specific client type at a meeting. Even more so, the comps were not always up to date. Michael realized that transferring all this data onto an online lease database would allow him to look up lease agreements at his own convenience. This began Michael’s long-time dream of becoming an entrepreneur. Using a gaming methodology and the idea of a sharing economy, participating brokers, researchers, and appraisers submit comps to CompStak and are rewarded with tokens, which enables the parties to access further comps of their choice. The exchanging of crowd-sourced information ensures that future deals are more efficiently or correctly priced. All the submitted lease data is verified by data scientists who compare the new data to past lease deals of similar location, client type, and other factors. CompStak then expanded to accommodate parties interested in investing in real estate. Using the extensive database, real estate managers can subscribe to CompStak’s enterprise software to analyze real estate market trends across over 50 different real estate markets throughout the U.S. and soon to be U.K. CompStak is backed by venture firms such as 500 Startups and Canaan Partners and services investors such as Goldman Sachs, J.P. Morgan, and Cushman and Wakefield.
Michael stressed to us the importance of finding a dedicated technical partner when looking to start a business and how much he enjoys the process of building his own enterprise with such dedicated employees who are in it for the long-run. He also mentioned that from that start his team focused on building a successful small-business first, but kept in mind a strategy for scaling up the business in the future. Michael faced challenges along the way, but his passion kept him going. He reminisced how he was sitting in his underwear and making phone calls to brokers he worked with to gather comps in the beginning. This was one of the many stores that reflect Michael’s energy and persistence.
Beyond the business insights, Michael’s humble demeanor was refreshing. Having made it on the Forbes 30 under 30 New York Real Estate list and Grubb & Ellis’ National Rookie of the Year 2007, participated in 500 Startups and more, it was an honor to hear from someone so accomplished yet so modest. Moreover, Michael’s passion and perseverance reflects his true entrepreneurial spirit.
We thank Michael for sharing his experiences as an entrepreneur and CEO and look forward to see what’s in store for the future for CompStak and Michael!