Startup utilizes AI to set real-estate prices
The pandemic has been devastating for so many businesses, but it has also provided opportunities for other entrepreneurs. Take the case of Montreal brothers Mark and Jordan Owen. Both saw their lives significantly altered by the COVID-19 crisis.
Mark, 28, was working for a local real-estate development firm and business had ground to a halt in the spring. Jordan, 26, was in a master's program in real-estate development and city planning at the Massachusetts Institute of Technology (MIT) and had come back to Montreal in March when all in-person classes were cancelled.
That's when they had the idea of starting up a company to produce reusable masks. They founded Bien Aller, named in honour of the Quebec COVID catchphrase “Ça va bien aller.” They created the firm with a friend, Sean Tassé, who had been laid off from his job at a construction-management firm because of the pandemic.
We saw that there was huge inefficiency in the market.
Six months later, they've sold about 300,000 masks and they're still producing them at facilities in Montreal and South Korea. Then the Owen brothers, Tassé and another friend, Benoit Thibeault, had a notion for a more unusual startup. The Owens' background in Montreal real estate had them thinking that what developers and brokers could really use is a more reliable way to set prices for houses and condos that are going on the sales or rental markets.
That's exactly what their company Squarefeet.ai does. It uses artificial intelligence to create algorithms to set prices for real-estate properties. The concept replaces the old-school method, which they believe has essentially been to follow gut instinct when fixing a price for a property.
“Over the past couple of years, we've been working with one of the bigger real-estate development firms in Montreal and we were often tasked with creating price lists for buildings,” Mark Owen said. “It was never systematic. It was really what we could call a gut feeling or experience-based pricing. We found that it was hard to make sure you were getting full value for each unit. So we came up with this idea because we saw the need and thought it could create a lot of value for real-estate developers.”
Said Jordan Owen: “We saw that there was huge inefficiency in the market, in the way that developers operate through set pricing and monitoring their price lists. So we created this tool based on the pain that we've experienced.”
Their AI platform was launched in September and they already have about a dozen clients who are using it for approximately 5,000 units in Quebec.
“Everyone loves it,” Jordan Owen said. “Everyone is like, `Why wasn't this invented before?' It's a pretty easy sell. It's a pretty easy foot in the door because we add value day one, and it's not very expensive for people to get on board.”
At the same time, they've kept their costs low, running a lean operation with just a dozen employees for both companies.
“There's always opportunity in business and in life,” Jordan Owen said. “It's just all about looking at it in the right way. In any situation, there's always a way to see the opportunity. When you're flexible and fast enough, you really have an advantage.”
It helped, of course, that Bien Aller was a 100-per-cent e-commerce business, precisely the types of ventures that have fared well this year.
“We made the best of an unfortunate situation,” Mark Owen said.