Taking the less-traveled route to climb a mountain

Omry Haizler
Zorba
Published in
5 min readJan 8, 2022

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Why I left Compass, a real estate leader, and joined the prop-tech startup, Zorba as Vice President of Operations

“I think you’re taking an unnecessary risk; why would you start searching for a new route up a mountain when an existing one already exists?!”

Those were the words I heard from my mentor when I told her I am thinking about joining Zorba, a distressed property marketplace startup that helps homeowners sell their house as-is, for the best possible price in under 30 days.

“The existing route sucks; it’s crowded, it’s inefficient, and everyone hates it!”

Those were my words answering my mentor, though to be fair, her criticism was not unjustified. I spent the last 2.5 years at Compass (COMP), an exceptional tech-driven real estate brokerage, a true industry leader with world-class operations, and a cohort of +20k of the most accomplished agents. I oversaw strategic growth in greater New York at Compass, acquiring top brokerages and teams. I partnered with product, engineering, and business people to bring agents a platform that keeps them at the forefront of their field and helps them better serve their clients. I am grateful I had the privilege to partner with some of the most brilliant minds in the tech and real estate space. Still, having worked with many brokerages, I started developing an itch about something missing, and over time that feeling became impossible to ignore.

Learnings that make you itch

Here are a few lessons from working with various brokerages:

  1. The traditional brokerage model is capital intensive and leans on operations; Quick revenue growth means that growth-profit and OpEx grow linearly.
  2. Brokerages are climbing a crowded route with minor differentiators. Overall, there are no apples and oranges; it’s all apples with different colors.
  3. Technology is not the core business and is not the primary revenue driver.
  4. With over 1.5M real estate agents in the US, it’s hard for brokerages to pivot from the traditional route.

Real Estate is Mt. Everest of Markets

Mount Everest has many climbing routes, none more popular or astonishingly overcrowded than the southeast ridge from Nepal; it is the least technical and the easiest to complete. But unknown to many, Mt. Everest has 17 different routes, with new ones still being pioneered and discovered. Suppose Mt. Everest represents the biggest addressable market in real estate, and climbing different routes symbolizes opportunity monetization through various business models. In that case, we are all trying to climb the southeast ridge - It’s overcrowded and slow; we’re desperately searching for a foothold. Still, we’re climbing, so we’re good, right?

Professional real estate agents are necessary for some transactions. But not always, and not in every transaction. While the traditional brokerage route is simple to monetize, it doesn’t always work- for sellers, buyers, and even the brokerages themselves!

Have you ever tried to sell a house on your own- If yes- How was your experience? If no- why not? Thus, the itch.

Could this happen to you?

A few years ago, my good friend Jason invested in affordable 6 Single Family units in Florida. A brilliant, Ivy League-educated finance guy, Jason had the investment all figured out; a 10% yearly ROI, a reliable property manager on-site, and a comfortable loan. Nevertheless, four years, three frozen pipes, two non-paying tenants, and one pandemic later, Jason’s properties became distressed so he knew it was time to sell, preferably quickly and for cash. He knew he had only two real options:

  1. Sell with a real estate agent- Sign an exclusive agreement, put it on the MLS, prepare/fix the property for showings, pay closing costs + 4–6% commission at closing, which may take months.
  2. Sell on his own- Put it on the market, find a buyer, manage individual showings, negotiate the price, and not unlikely, end up selling it to a wholesaler.

Where are all the alternative routes?

If real estate is the highest mountain, why are there only a few routes up its peak?

Despite the various apps, i-buying options, and platforms, buyers and sellers still transact the same way for decades, and transforming the incumbent with disruptive innovation will likely start from the bottom up, as coined by Prof. Clayton M. Christensen from Harvard:

“Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then moves upmarket, eventually displacing established competitors.”

Explore New Routes

Having worked closely with brokerages, I have encountered many stories similar to Jason’s, examples where technology was necessary, and new routes were required, though absent. One of the most significant opportunities lies in the distressed property market, assets that are either in a state of disrepair or owned by individuals experiencing personal, legal, or financial constraints. Real estate is a $10.5 trillion market, and distressed properties are over 10% of it, a $1T opportunity. It is an amalgam of motivated sellers looking for all-cash deals and disarray of investors, flippers, and wholesalers characterized by a fluctuating mix of professionalism and ethics.

Here are a few examples of new routes in legacy industries:

  • Insurance was considered too traditional for disruption, but in 2015, Lemonade, an insurtech leader, started from the bottom offering rental insurance. At a $2.6B valuation, we now feel comfortable buying an insurance policy from a bot.
  • We considered it absurd to sleep at a stranger’s house, but in 2008, Airbnb started offering strangers’ houses at SXSW; At a $104B valuation, we’re all in.
  • We considered it dangerous to upload our credit card information online, but in the late 90s, Amazon started offering books for sale online. At a $1.69T valuation, we transact billions of dollars online every year.

Introducing, Zorba.

Led by two of the most focused, hard-working, and relentless entrepreneurs, Zorba is a marketplace for distressed properties where sellers and investors can transact directly with complete transparency, speed, and ease at a desirable price. I decided to join Zorba because we share the belief that technology accelerates the transition to fully automated transactions and offers new ways to bring value to homeowners; whether they are in financial distress, their house needs some love, or just want to avoid the hassle of listing the traditional way.

It will be a long route up the mountain, treacherous but exciting, filled with fears and doubters. I am honored that the Zorba team invited me to join them and humbled by their success so far. As for my mentor, sometimes it pays to just go with your gut; I promised her that, this time, I would stay to enjoy the peak. I am excited about what the future will bring. Let’s start climbing this thing!

If you too believe that real estate transactions can be meaningfully disrupted and transformed by technology and want to hear more, please make sure you give this post 50 claps and my blog and Zorba page a follow. Much more to come!

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