Finding Purpose

Done is better than perfect.

I have played around with the idea to start a business for quite some time. It’s a continuous iteration and curation of ideas. I keep a startup-ideas spreadsheet organized by problem, solution, and realistic setup cost. It helps me to funnel all the ideas that hit me throughout any given day.

Initially, Cedar Bay Group was not intended to be a standalone company. I knew I wanted to break into the real estate market. As a property owner, I believe I can empathize with other property owners when it comes to finding, analyzing, and purchasing real estate. Beyond that, I believe I do understand the challenges around property maintenance, continuous tenant management, and cash flow. Now, today’s real estate market is quite an interesting environment. Partially, it is undergoing an evolution exhibited by a growing proptech segment. Yet, it also seems stagnant in other areas around in-person services and process documentation that resembles the late 18th century. Only 15 years ago, the U.S. real estate market was hit by the 2008 subprime mortgage crisis. Some analysts argue the 2023 housing market is about to crash again. If mortgage rates and consumer prices increase, sales of real estate will decrease. Property owners want to hold onto their real estate (if they can afford it).

Affording anything in life really was a leitmotif to break into the real estate market. As someone who has moved more often than some people change their underwear, I understand the financial worries surrounding a real estate transaction. Hesitation can be paralyzing. Uncertainty can be crippling. To mitigate such a predicament, I wanted to further expand services offered around creative financing in real estate. Vacation and short-term rental management is an overcrowded yet underserved segment of the travel industry. On the one hand, it is a pathway to financial independence by generating an income for property owners to help them pay off any mortgages or debt. Contrary to popular belief, however, it isn’t something that should be regarded as easy money, or, worse, viewed as a unilateral business transaction. Guests break stuff. Vacation homes require maintenance. Natural disasters, climate change, and increasingly frequent weather extremes create force majeure circumstances that annihilate dividends and rental income. Any common-sense homeowner will calculate the operating cost of a property against different risk scenarios. The time investment portion of managing a property is the most overlooked part. An average salary of $50,000.00/year translates to roughly $25/hour. A property manager charges an average of 15% per month at an average rent of $2000. That’s a measly $1.87/hour. The service level for tenant and guest satisfaction are other elements often underestimated in both execution and scale. Vacation and short-term rental properties generate an income through high occupancy, or the number of days per month a place is booked out, and an adaptive pricing strategy. Both factors hinge on guest satisfaction. In addition, it takes operating at scale to really offset costs and fortify positive cash flow. It would be naive to assume guest satisfaction, pricing strategy, and managing finances of a property can be done on top of a regular 40-hour work week. Let alone spending time with family and friends. This begs the question: what is done to serve property owners, hosts, and those that offer a place to linger? As a homeowner ask yourself: how do you spend your time? While vacation rental management companies serve different segments of the travel industry, there aren’t many consolidated, full-service options that free up property owners’ schedules while generating consistent revenue from wonderful guest experiences.

Once it became clear to me that a streamlined, scaled service for homeowners could enable them to spend more time focusing on their families and growing their net worth, therefore improving the vacation experience for guests, I knew I had a purpose. But a purpose is not worth writing about without execution. A “done is better than perfect” mindset inspired me to get going and simply start writing a business plan and developing service and pricing models. Now, this is how I approached finding purpose before starting a business. You may want to explore your what, how, and why before you start up a business. There are a million other approaches to finding your specific purpose. As a takeaway, perhaps think about these three steps:

1. Observe your environment. Take note of what catches your attention.
2. Analyze your environment for problems and ideate solutions for those problems. Think about the cost of doing business.
3. Execute. A done business plan is better than a perfect business plan. Find your niche and don’t look further. Just do it already.

This post originated on my substack Codifying Chaos.