Origin Stories: Reonomy Co-Founder Rich Sarkis On Being The Cockroach Of Proptech
This series delves into the myriad ways people enter the commercial real estate industry and what contributes to their success.
Rich Sarkis had no prior commercial real estate experience when he co-founded Reonomy, a data and analytics platform that leans on public documents to compile information like construction date, building ownership, debt and tax assessments in one place, in 2013.
He leaned on conversations with CRE execs to grow the platform, and now Reonomy has taken off, including expanding nationally out of New York in 2017. But Sarkis doesn't dream of being a proptech unicorn — unicorns grab the headlines, but they also can be fragile. His goal in building Reonomy is to be a cockroach, a company that can survive downturns fairly unscathed.
Bisnow: How did you get introduced to CRE?
Sarkis: Before Reonomy, I didn't know much about commercial real estate. I never really thought about it and hadn't intersected with it much. However, I had been a lifelong entrepreneur and when I was connected with the person that become my co-founder at Reonomy, Charlie [Oshman], he had been thinking about the world of commercial real estate, data and analytics. Once we began collaborating, we started going down the rabbit hole of this massive asset class that historically hasn't seen much of any real technological innovation and a number of inefficiencies that we thought we could solve.
Bisnow: What was your first job in CRE?
Sarkis: Founding Reonomy was actually my first job in the CRE industry, in a tiny Chelsea space in NYC. While I didn’t necessarily always know I’d be working in CRE one day, I knew it was an industry with a ton of opportunity and I’m grateful it’s the industry I ended up in.
Bisnow: What kind of education, certification or official training do you have in CRE? How critical was it to landing your first big role?
Sarkis: I did not receive any official certification or training specific to CRE. My biggest asset was listening to people in their jobs as we built Reonomy — lenders at the big banks, brokers at the brokerage firms, investors, developers. It was a pretty steep learning curve. I had to learn all the acronyms and the different use cases, but I learned a lot by just doing.
Bisnow: What is one skill you wish you had coming into CRE?
Sarkis: It was a blessing and a curse that I didn’t have CRE experience prior to founding Reonomy. The good part was that I didn’t have the baggage of being stuck in the standard way of doing things. But on the flip side, it was difficult not to know firsthand what the pain points are. Oftentimes, you'll find the story of an entrepreneur founding a company where he or she has witnessed and been part of the pain firsthand. But I've spent a lot of time over the years with customers and with folks within the industry learning from them where the opportunities are to make progress.
Bisnow: What were you doing before you got into CRE? If you changed careers, did you bring anything with you from your past career that has helped you thrive in CRE, or, on the flip side, anything you had to unlearn in order to succeed here?
Sarkis: The first-ever business that I started was an international arbitrage business when I was in college. I set up a business to reimport college textbooks that could be bought for a fraction of the price overseas and distributed them through a network of thousands of student reps at college campuses throughout the U.S. Over the next two decades, there were a series of other businesses I started and spun off. When I went to business school, I cut my teeth into more formal business training and that’s how I ended up at McKinsey in management consulting for a few years. Then I found my way back home to starting Reonomy, which is where I am today.
The CRE industry is one that's very entrepreneurial and that mindset has allowed me to have a meeting of the minds and really connect at a fundamental level with not just the individuals, but also the companies that Reonomy works with. In this industry, people think about their businesses and themselves as entrepreneurial, as opposed to structured and corporate. I found CRE to be more open to entrepreneurial thinking. Given my background, my path has been a little bit of a secret weapon and helped me succeed.
As far as unlearning, when I went to business school and my position immediately following at McKinsey, I learned a lot of critical thinking, communication skills, quantitative skills, and the like. It was pretty traditional and corporate. Once I ventured into the CRE industry, I had to unlearn a little bit of that corporate think that was imbued.
Bisnow: Can you remember a moment where you felt in over your head or you worried this industry wasn’t for you? Did you ever think about quitting? What changed?
Sarkis: I never really had a moment where I felt like quitting. I do remember a couple of moments where my heart was in my mouth and I was nervous about whether something would work or not. I was once giving a very important presentation early on in Reonomy’s existence. The person we were presenting to said, “Well, let’s see if this actually works.” We then had to walk him through the platform using it in real time. I knew it was going to go really great or really bad. It ended up working really well and he was almost in disbelief. That was a moment that definitely could have gone the other way, and it would have been a pretty big blow. You only get one chance to make your first impression and when you’re trying to make a good impression, if it goes south, it can be pretty tough to recover.
Another big learning moment was when we were transitioning Reonomy from a New York-focused platform to national coverage. There was a lot of trial and error that went into that process and thankfully we’ve been able to scale our coverage effectively, while maintaining the quality that our customers have come to expect.
Bisnow: What were your early impressions of the industry, good and bad? How has your impression changed?
Sarkis: I mentioned earlier, but one of the early impressions was that the industry is very entrepreneurial and that people are again, entrepreneurial versus corporate. There isn’t necessarily a resistance to technology and change, but definitely a slight attitude towards “why consider doing something new and risky if there is a system in place that’s working?” But, back to the entrepreneurial mindset, I think to the industry's credit, people are usually willing to give something a shot. There is a lot of noise in CRE that you have to cut through. How do you know if something is just marketing or a really innovative solution? People’s livelihoods are on the line and if they take a risk on a technology, it can be money out of their own pockets. So, you do face that initial skepticism, but if something really works, it’s embraced.
Bisnow: Have you had a mentor or sponsor? How did that person shape your future in CRE?
Sarkis: I haven’t had a mentor or sponsor, but I have made great friends with a number of folks in the space who have taught me a lot. They have been forward-thinking entrepreneurs who are ready to attack approaches to data, innovation and take risks to make changes. It’s important to have people to bounce ideas off of, and those who are not shy to tell you that something is the worst idea in the world or give encouragement if they think something has real promise.
Bisnow: What is a key lesson someone taught you, either kindly or the hard way?
Sarkis: At most companies, if not all companies, there is going to be a gap between what they say they do and what they really do. That's sort of inevitable, but how far beyond that line do you stray? What I've certainly learned over the years is that you have to be honest. It’s not enough to just market a product if the product doesn’t live up to how you are showcasing it. That's usually something you can’t recover from. It’s also something that, in my opinion, is not really ethical. It’s best to fully invest in making your product best-in-class first, and then selling it will be much easier and honest. That's something that I've always tried to abide by certainly personally and with Reonomy.
Bisnow: What do you warn people about when they join the industry?
Sarkis: You have to be truthful, honest and upfront.
I would say the other one is the industry is very meritocratic. This industry has a ton of potential for those with an entrepreneurial spirit who are willing to put in the work to succeed. While the real estate industry in general has always been known and thought of as being very traditional and legacy-oriented, there are new startups popping up in this field left and right that are certainly changing that status quo. I think you've got to put in the work to earn it and to make it, but if you do, it's rewarding.
Bisnow: If you could do your career all over again, what would you change?
Sarkis: I actually wouldn't change anything. I’ve had ups and downs and I'm sure I'll continue to have ups and downs — I mean the time we’re living through right now is challenging and you really can't prepare for some things. I think as long as you realize that the sun will come up tomorrow and you live to fight another day, that's probably the most important thing.
I always laugh when I remember those middle years at Reonomy when we were scaling, the term unicorn was all the rage. Who was going to be the next unicorn? I remember a reporter once asked me, “Are you really focused on being the next unicorn?” And what I said is, I view myself much more like a cockroach. Right now, yes, it's all very flashy to have a unicorn valuation. But in my opinion, when the pressure is on and when the market turns, unicorns aren't going to survive because I don't think that they're scaling their business sustainably. But just like in a nuclear explosion, the cockroaches are the ones that sort of hunker down and they somehow survive it all and emerge unscathed.