In 2015, best friends Noah Isaacs and John Meadows set out to bring the commercial real estate appraisal industry into the 21st century, even if they had to drag it there kicking and screaming.
The appraisal report is often the key bottleneck in a commercial real estate transaction, taking an average of 2-3 weeks to be delivered. And in the course of laboriously creating an appraisal, appraisers spend roughly half their time on busywork, having to use dozens of disparate tools and manual processes to complete a single report.
Bowery Valuation, the firm Isaacs and Meadows started, improves the efficiency of the commercial appraisal process by automating tasks such as formatting charts, creating graphs, pulling in and making tax maps, finding comparables, etc. In addition, every piece of data that is found and used in Bowery Valuation’s reports is saved for appraisers to use in the future. This means the software (which includes a mobile inspection app, exhaustive databasing and natural language generation) gets smarter every time it is used.
Micah Solomon, Senior Contributor, Forbes.com: What brought the two of you together as entrepreneurs?
Noah Isaacs, Co-Founder and Co-CEO: I’ve been friends with John Meadows (my co-CEO) since we were kids growing up in Berkeley [California]. Our first collaboration, while we were still at college, was the creation of the California League Review, an online resource for scouting information about college and minor league players in California, which stemmed from our shared love of baseball.
A few years after college, we were both in New York City working at large commercial real estate appraisal firms. It was there that we had our “there has to be a better way” moment, and decided to go out on our own, working to build the appraisal tools that we ourselves wished we had.
Solomon: Tell me more about your pivotal moment. I’ve had one or two dead-end “straight” jobs, but the only epiphany I ever there had was, “I can’t do this for my whole life.”
Isaacs, Co-Founder and Co-CEO: When I started at the appraisal firm in NYC, I was shocked to learn how archaic the systems were that were being used in the industry. Appraisers would visit the same 10-15 websites over and over and manually enter data into excel spreadsheets that linked to Word documents. Inspections were done using handwritten notes that then had to be manually entered into the computer when the appraiser was able to get back to the office.
Meadows: It seemed crazy that highly trained appraisers were wasting perhaps half their time on manual busy work and data entry, and that it took such a long time to get appraisals out to clients. Noah and I were sure there was a better way to use technology, and if we could put it together ourselves, it would revolutionize this industry.
Solomon: How did you get started on the project?
Isaacs: Well, we had saved enough money that we could–barely, but still–quit our jobs and get going on the project that became Bowery Valuation. But neither of us knew how to actually build the software that was needed, so we solved this by teaming up with our third Co-Founder and CTO, Cesar Devers, who had the needed background and aptitudes.
Solomon: How did you go about raising capital?
Isaacs: We were fortunate to get into the MetaProp accelerator in NYC and were able to leverage those connections to raise our seed round after that program.
Meadows: From that point, we took roughly 60 meetings in two months to raise our first round. We got really used to hearing the word no, but ultimately a number of VCs gave us term sheets [nonbinding agreements prior to a formal commitment] and, ultimately, we gathered a really awesome group of initial seed investors: Camber Creek, Fika Ventures, Corigin Ventures, Lefrak, and Expansion Venture Capital.
Solomon: Walk me through a bit of what makes your product such an improvement on the status quo.
Meadows: Here’s an example. We spent the better part of two years working on data validation and integration with public records (land use maps, zoning maps, tax info, etc.), so we could save time for our appraisers while also ensuring every report our clients receive contains accurate data and calculations. When an address is entered into our platform, all of that public information is automatically entered into the appraisal draft. The appraiser is still able to edit the information as necessary, but the head start this integration allows for can save our appraisers up to three hours per day.
Isaacs: On the inspection side, our cloud architecture enables our mobile app to be integrated into the desktop. While the appraiser is still on site, he/she can populate the report with photos, notes and other property information. This means that information isn’t lost when translating scribbled notes into actual report verbiage.
Solomon: How’s it working out being co-CEOs?
Meadows: Well, remember, we go way back as friends. I can’t speak for both of us, but for me, I find sharing power to be–most of the time–comfortable and natural. As far as the business value of having two CEO’s, what we’ve found is that it makes us more efficient. Bowery Valuation is literally able to have its CEO–one of its CEO’s–be in two places at once. As we open more offices, it allows one of us to be off dealing with the new space while the other keeps things moving at headquarters or takes a meeting with an investor. We work incredibly well together, and having two CEO’s has really allowed us to do more than we otherwise could do.
Isaacs: I also think it allows us to make smarter, more thoughtful decisions. We’re able to explore multiple perspectives and really play devil’s advocate with one another, which leads to superior outcomes than those made in an echo chamber without checks and balances.
Solomon: What’s next for Bowery Valuation?
Isaacs: Our focus now is on continuing to expand our market reach. We currently have offices in NY and Washington DC, and cover the majority of the East Coast with those two offices, but we are consistently focused on our expansion into new markets. But in contrast to most expansion plans, ours is focused more on people over specific market. We are hyper-focused on continuing to find best in class appraisal talent to lead our new offices. Where that appraisal talent is, geographically, is less of a concern for us.
In tandem with working on expansion into new markets/offices, we are considering launching into new verticals as well as working on some product ideas that we believe will add even more value for our clients.