Partnerships often provide a great platform for growth and success for companies of all sizes, big and small. My company Pacaso’s business model is built almost entirely around partnerships — from community leaders, banking partners, real estate agents, brokerages, or even local businesses ranging from lawn care, home cleaners, and other service providers.
Most importantly, the relationships between a company and its customers and employees are also partnerships. They are probably the most important partnerships of all. But getting partnerships right can be hard. I wanted to share a few examples of partnerships in our business at Pacaso and reflect on some of the best practices that I have learned over the years.
One of the secrets to Pacaso’s fast growth is our early investment in building partnerships with real estate agents all around the world. We have forged important relationships with recognizable brokerages and agents including Engel & Volkers, RE/MAX, and leading real estate teams such as the Altman Brothers in Los Angeles or Roh Habibi and his team in San Francisco. With these partnerships, both parties have a lot to gain. The real estate agents and teams have credible brands and networks of prospective buyers and are the local market experts in their craft of selling real estate, thus bringing us a lot of value. We also bring them great value because we have a tool and a service that adds value to their clients – empowering families to unlock second homeownership at a lower cost than the traditional second home or to rightsize ownership in their existing homes.
Similarly, we always look for ways to partner with local businesses whether it’s a furniture manufacturer, an interior designer, a local bookstore to fill the shelves of our homes or a winery. Where I live in Napa Valley, we often refer Pacaso owners to local brands we love such as various winery friends that we have in town, such as John Anthony Vineyards. It’s great for the wineries because they grow their business and club memberships and it’s also great for us because we can provide our owners with special access.
Our newly formed government advisory board of former and current elected officials is another great example of a valuable partnership, as we leverage the leaders’ many years of experience to inform our community policy and strategies which add a lot of strategic insight to Pacaso. It’s also valuable for them because we are working together to be part of the solution for the housing crisis that many of these communities face.
Partnering with nonprofit organizations or causes allows you to have an impact beyond your core business. Through second home co-ownership, we reduce competition for single-family homes in destination communities. To go even further, we form partnerships with local organizations like the Teton Board of Realtors’ Community Housing Fund and Burbank Housing to support their efforts to create affordable housing.
Here are a few insights that I have learned over the years about what is important when building and maintaining partnerships:
First, it must be a win-win. This means both sides must derive a lot of value from the partnership. This can be harder when two companies are of different sizes. When you have a very large company and a small start-up, oftentimes it is difficult for the small company to deliver enough value to justify the big company’s time. Occasionally, those partnerships can work but more often than not, I have seen the best partnerships with companies that are similar in size or have very complementary value to exchange with one another.
Oftentimes, partnerships play out over many years. For example, before my first company dotloop partnered and merged with Zillow, I was building that relationship with the Zillow team for four years before that moment. In the early years, it was all just about building the relationship not knowing what sort of partnership opportunities might evolve in the future. I found it to be really helpful to build the relationship and it translated into a powerful partnership over time. Do not expect these things to happen overnight.
Always look for synergies in the mission and alignment in the financial interests. Our partnership with the real estate agents is a great example of this. We are both focused on healthy prospective home buyers to realize their home ownership dreams. They get paid and Pacaso also earns a fee as a result of that transaction. We have got great alignment concerning our mission and goals, as well as our financial interests in the transaction.
Above all else, I think it is always helpful to remember to lead any relationship, partnership or otherwise, with a giving mindset. Recently, my good friend Tom Ferry, who’s a leading real estate coach, spoke to our crew at Pacaso. We were talking about referrals and he shared that you must expect to give value three times before expecting anything in return. I think that’s a great way to think about how you approach any relationship, especially partnerships. As you think about growing your business or career, do not underestimate the power of great partnerships.