Jun 13, 2022
From the Atlanta area, Jake Marmulstein is an entrepreneur and business executive with a variety of experience, including ERP to SaaS, digital marketing to education technology, and hospitality to real estate. He has advised executives of early-stage companies, lead operations and finance, product, sales, and customer success efforts.
In his current operating role, Jake is the Founder, President & CEO of the Real Estate Investment Tech SaaS company Groundbreaker Technologies. He made the initial angel investment, completed key hires, established selling, financial and operational systems, lead a Series Seed-round of financing, and continues to grow the company.
Jake received his bachelor's degree from Cornell University, where he emphasized hospitality and minored in real estate. He studied abroad in Rio de Janeiro and at Cornell was involved in grant writing for grassroots community service organizations while also forming a non-profit peer-to-peer mentorship organization. Jake has worked abroad in London, Madrid, Rio de Janeiro, and Puerto Rico and has a working proficiency with Spanish and Portuguese.
Stay tuned and listen to how Jake Marmulstein shares his knowledge on the future of Real Estate Syndication through their Groundbreaker Technologies.
[00:00 - 04:29] Groundbreaker Technologies: How to Scale Your Real Estate Investment Business
- Jake started his CRE investment career in 2011 at Watermark Capital Partners, a hotel REIT in Chicago
- He co-founded Groundbreaker, a software platform for real estate syndication, and began to build it out
- The platform is now used by real estate operators to raise money and manage their deals
- Jake has experience in software development and engineering, which helped him build the platform
[04:30 - 12:19] Groundbreaker Partners with JV Equity Partners to Bring on Larger Deals
- Jake shares that they were able to get press coverage for their solution after building a basic version on the web.
- This helped them to attract interested prospects, which led to them being able to pay their office expenses with revenue from their solution.
- They are looking to build a comprehensive ecosystem of services that will help their customers grow and be successful.
[12:19 - 17:20] Groundbreaker Software Introduces Education Program to Help New Class of Real Estate Syndicators Succeed
- Knowing that operators don't do deals alone, Jake and his company study carefully what that experience has to be and build a feature that allows people to do deals with each other without the problem where they share the data from their own investor list with the other group.
- They Don’t want to be a CRM system or an email marketing system, but instead an investor management software.
- Jake notes that they have overcome alignment within the organization, but it's really hard to be able to work with people who aren't yet successful at doing a deal.
[17:20 - 18:45] Closing Segment
- Jake Marmulstein, CEO of Roundbreaker, offers listeners a three-month free trial of their annual subscription if they type "Bricken" into their website's request form.
- Jake also recommends LinkedIn and Roundbreaker's website for contacting him.
- Reach out to Jake
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- See links below
- Final words
Tweetable Quotes
"At the end of the day, were we going to be a financing system, were we going to be software? We can be both and really fielding those all structuring my questions and doing customer discovery." - Jake Marmulstein
“It's real estate syndication. There's some complexity in doing that. Even marketing yourself to investors and building your investor base requires you to have an investment thesis and understand who the investor is that you're going after.” - Jake Marmulstein
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Jake Marmulstein: if you're an operator and you're looking at who can be the best partner for you. You want to surround yourself with companies that are gonna really care about where you are now and help you to scale as you continue growing to set objectives that are mutually beneficial for both of you so that they have a vested interest in your success.
[00:00:21] Sam Wilson: Jake began his CRE investment career in 2011 at watermark capital partners, a hotel REIT in Chicago, and after struggling to raise capital for his own deals, he found a groundbreaker a software platform for real estate syndication, Jake, welcome to the show.
[00:00:47]Jake Marmulstein: Hey man, pleasure's mine.
[00:00:49] Sam Wilson: There's three questions. I ask every guest who comes on the show in 90 seconds or less. Can you tell me, where did you start? Where are you now? How did you get there?
[00:00:58] Jake Marmulstein: So when I studied at Cornell university an undergrad, I did a real estate minor. I graduated, worked in the city government of Rio de Janeiro doing foreign investment promotion. And that's where things all started for me. Now I'm in. Chicago, Illinois as a CEO and founder of groundbreaker technologies, a real estate investment management software company. And I got here by getting the experience, the basic experience that I needed. Throughout my early corporate career to identify there is a pain in the space for a lot of real estate operators experiencing it first myself, and then going to the market and looking at the way different firms were dealing with the problem. And I just, started with 10 grand in my bank account and the dream.
[00:01:48] Sam Wilson: That's awesome. I love that. Do you have a background in software development, engineering, anything on that front?
[00:01:56] Jake Marmulstein: I have friends.
[00:01:58] Sam Wilson: All right. I liked that. I liked that. So tell us, how did you from concept to getting the idea hatched and built? Give us that quick story, because I think this is compelling for a lot of people that are sitting on ideas and don't necessarily know where to start.
[00:02:12] Jake Marmulstein: So the, when, when groundbreaker was conceived as a idea, it was the first step frustration. And then there was changes in legislation, such as the jobs act, which pushed real estate platforms that were technology driven to do crowdfunding and market themselves pretty widely. So you think of like fundraise and Realty, mogul and Realty shares, and groundbreaker. Started basically as a result of some of that, we came into the market and said, well, there's a lot of people that are raising capital and underwriting deals, but the software in this technology to infrastructure is still needed.Is there going to be a world in which everybody has a technology and they're raising money from their own investors or crowdfunding, or, how's this all going to play? And we saw that the technology is needed in the space. And it's just a matter of time before all real estate operators will be tech enabled to have a system that they can use with their investors. So that raising money happens over in electronic means data and information is no longer stored in Excel. And that's the vision that I had when all of that was happening. it's a combination of laws that were changing and just the times, and, consumer behavior where people are moving towards using more digital solutions to interact with financial technology, looking at banking, brokerage, all of it is going towards having a login and a portal. So you can check your information from your phone. Why not real estate?
[00:03:52] Sam Wilson: Yeah. Yeah. That's a, that's, you're absolutely correct. So what were some of the first steps you guys took in building this out? Having friends, but then going all right now, we're gonna develop a software. Now we're going to bring on team members. Now we got people to pay salaries, payroll, like how did all that work? And then when did you say man, this thing's actually gonna make money.
[00:04:12] Jake Marmulstein: So that part was a little bit more nebulous when we began. We had a vision and that vision was strong enough to get people to come on board and spend their time working with us without having to necessarily take a salary. So we had equity in the early days, they were giving to the talent that came and built the product for us. And then we use that vision to convince. Reporters to talk about our solution. After we had a very basic version up on the web. And so we got press, which gave us free advertising, which brought in a lot of interested prospects to our website. And I would feel the calls and talk to them about their problems without actually knowing what the solution was going to be at the end of the day. Where we going to be a financing system where we're going to be a software where we can be both and really fielding those calls, structuring my questions and doing customer discovery. There's a course that Steve blank does called customer discovery. If you're ever going to start a company, you should absolutely take that course because the process to understand the customer segmentation and their pain points. Helps you to be able to chart the course on which problems you want to solve and which problems you don't want to solve and for whom. And so we identified that the problem was while people wanted access to capital, there was also a segment of the market that wanted better systems to be able to manage the capital that they did have. And so looking at the way that the market was moving. And the risks associated with being the capital provider and underwriting all those deals. We wanted to move in that direction of being a technology provider. And so we use that vision to sell those early prospects were really interested in what we're doing to pay us, $500 a month for the software and pay us an implementation fee to get it started. And so really we use that vision, that dream to sell people on the product before. We really had much of a product built by making them early customers and helping them build the product with us. And then it took me about Six months of not taking any salary and the business, really not making any money, just, paying its office expenses in order for us to crack through some revenue that resulted in a distribution to the partners.
[00:06:34] Sam Wilson: I liked that. That's a lot of the way that people who are starting out in, especially building teams early on as the active. Sponsor or investor. A lot of us start out that way where it's like, Hey, we're all going to get together. And we're going to, we're going to put our heads together and work really hard. And then it might be six, nine months or a year before we crack the nut and actually begin started making the money. So I like, that's not an unfamiliar chart or an unfamiliar territory for many of us. Tell me, you said there that you guys were trying to decide early on whether or not you want to do. Finance company, or you want to be a technology, you guys went into technology, but yeah, one of the things you and I talked about off air was that you guys are looking to build a comprehensive what you call it, a comprehensive ecosystem of services. Can you break some of that down for us?
[00:07:17] Jake Marmulstein: Yes. So the real estate operator who uses groundbreaker and we focus on is a small to mid-size. Syndicator that may have a couple of deals that they've done using Excel. And they're mostly communicating with their investors through email. Maybe they use Dropbox or a CRM system, and they want to formalize their business and be more professional and more efficient by using a solution like groundbreaking But also these folks don't have a well-established network or relationship with capital partners and services. So there's other solutions that we can provide as a business to be able to make that experience of going from. One to two deals to 10 deals or 20 deals or $2 million sized deals, $10 million sized deals, easier and more scalable for the company that's working with us. So when I say the services ecosystem, if you're an operator and you're looking at who can be the best partner for you. You want to surround yourself with companies that are gonna really care about where you are now and help you to scale as you continue growing to set objectives that are mutually beneficial for both of you so that they have a vested interest in your success. And groundbreakers is doing that for the sponsors that we're working with by having a long-term vision where we rolled out. Different services that are embedded into our core product and our system so that you can get everything you need from us, whether that comes from legal or underwriting or capital or insurance, or even help operationally on the deal. Because we are a technology company that's providing that infrastructure, that layer to organize your business. But once you're using us, you're also. We're also, in a way, partnering with you because the more that you grow and the more deals you do on groundbreaker, the more successful you are as a customer, the more we're we are successful, the more you're likely to bring on other deals or other customers to us. So we want all of our customers to grow up and supporting them through those services as a way of helping them. And it's also a way of us creating additional revenue opportunities for the business.
[00:09:40] Sam Wilson:What's it been like, cause each of those sound like their own siloed kind of business, if you're bringing on, JV equity partners and getting to know those people out there that are looking to joint venture, but don't want to necessarily be the active sponsor. And now you're building out a technology platform and then you're connecting all of those. What's that actual process like and how do you silo those and perfect each of those without distracting from your corporate.
[00:10:04] Jake Marmulstein: That's a great question. And we've thought about that a lot as we worked on piloting some of those services and getting initial traction from them, our core business is to bring on. Early in up and coming real estate syndicators that want to build and scale their business. On top of groundbreaker looking at us as a partner, that's going to help them to grow and the way that we impact growth through the. Other services is mainly by partnering with best-in-class providers and allowing those partners to have access to customers so that they can render their services and the customer can get value when they need it. So an example of that would be. One of my clients is doing a $12 million deal. It's one of their first larger deals. Initially when they began with us, they were doing smaller deals, like $3 million, $4 million deals in C class with C class assets, C class locations. And they really proved themselves out over the last two years and build their business. And they were successful in turning a lot of those assets. But now they want to swing for larger size deals. And their investor base is also confident to be able to invest more capital in them at this point. But they're going to need some additional capital to be able to fund some of these larger acquisitions. And by having that relationship with groundbreaker, we're able to know where they are in their cycle, what they need. So we've told them about our programs. Okay. They're entering into those services by giving us the information on their deal, and then being able to have calls with our equity partners, to be able to source capital from them and see if there's a fit amongst the investors that we can bring to the table.
[00:11:59] Sam Wilson: That's really a really unique. Are there any other elements of the kind of tech platform that you guys are thinking about or building out or see things coming down the pike that you say, Hey, this is this something we're considering? And here's ways that we plan on implementing it?
[00:12:14] Jake Marmulstein: Well, we're doing a co-sponsorship is the really big one. We know that. Operators don't do deals alone. A lot of them work with others. So we're studying really carefully what that experience has to be and building a feature that. Allows people to do deals with each other without the the problem where they share the data from their own investor lists with the other group, because a lot of sponsors, care so much about that investor list that they've worked so hard to build. And even though you're partnering with someone and you trust them, you still want that data to belong to you and only yet. So that's one of the big ones. And then we don't want to be a CRM sister. We're an email marketing system. We're an investment management software and we're going to continue being best in class in that. Whereas the CRM is going to be integrated into groundbreaker so you can continue to use your active campaign or your HubSpot or whatever CRM use, but it'll sync the data with our system so that those triggers. Anything else that you're running in those campaigns can be run in tandem with what happens on groundbreaker
[00:13:30] Sam Wilson: right. that's really cool. And that's one of the things that. Finding those integrations, I'm going to use that word. I'm not a tech guy, so you'll have to forgive me is that I can barely send an email, but I know that the integrations, when they work smoothly makes life so much easier. And I think that's what we're seeing is across the web and everything else is just all these different programs that we have to use because each one specializes in its own thing. But if they don't integrate and talk, it's like. This is really frustrating. So that's really cool that you guys are solving that problem. What are some challenges that you guys are facing right now that are not maybe have you stumped, but certainly have you scratching your head? Go, gosh, how are we going to overcome this?
[00:14:10] Jake Marmulstein: No, that's a great question. Until recently it's been. Focus on focusing on the core customer segment that we're dealing with and understanding what you know, what to build in for whom. But we've really overcome that alignment lately within the organization. It's really hard to be able to work with people who aren't yet successful at doing that. And we want to be able to serve those operators and help them. But a lot of them just don't have there. There's just a lot more that they need to be able to be successful. And we can't address those needs in the market. So we want to be able to be a big and successful company that serves a lot of operators, but we just have to stay focused on the operators Actually can, can value our help and use it to be able to build and scale their business. So I think a lot of the people that may be listening to this call would be appropriate. But there's many people that are entering the space as beginners who, haven't done a deal yet. And that's a real challenge is figuring out a way it is, I would love to figure out a way to work with them, but unfortunately I don't think we can.
[00:15:25] Sam Wilson: Yeah. You can't be all things to all people. That's a, that's certainly true. And I think that's an interesting point you make.Cause you want to be able to find a way for people to adopt your software early on. You want to build to bring them on and say, Hey man, come in, come into the fold, get to know us as you grow. Won't this be great. But it also sounds like you also don't want to be the baby. Saying. Okay.] All right. Let me teach you all about what you're doing and how to raise capital and how to use this. And it just, it sounds like there needs to be some level of not just rudimentary, but some sophistication involved before somebody can really adopt what you guys do.
[00:16:00] Jake Marmulstein: Yeah. It's, real estate syndication. There's some complexity of doing that. Even marketing yourself to investors and building your investor base requires you to have an investment thesis and understand who the investor is that you're going after. And it's, it is a beautiful thing what's happening right now in the world. I think that the market that we're in right now is growing significant. More people who are working nine to five jobs in the corporate world, or working from home and exploring ways to invest in real estate. People who are commercial real estate brokers are figuring out, Hey, why don't I invest, and do my own deals. There's a lot of people that are entering the market and will be entering the market and in the future. And I think we're in a good position to be able to help all those people, but there needs to be a base level. Education program. And, we work with groups like Jake and Gino and Joe Fairless and other types that are helping to educate that a new class of real estate syndicators. So I'm hopeful that those guys will continue to be the babysitters for the market if you will.
[00:17:10] Sam Wilson: Yeah. That's absolutely right. I absolutely love it, Jake. Thanks for taking the time to really break down what groundbreaker does, the problems you can. Are seeing and solving in the marketplace. I think that's really cool. You're building something that I think even across is as can fairly familiar with, everybody has competitors and I'm fairly familiar with even some of your active competition. And I think you guys are doing some things very differently that are solving problems, maybe that other people aren't in the marketplace.So that's absolutely cool. I love it. Jake, , Hey, so one of the things that you offered to our listeners to this show certainly appreciate it. I found it here was that if you're listening to the show and you type in the word BRICKEN, when submitting a request or your website, you can get three free months of groundbreaker when you sign up for an annual subscription. So, Jake, thanks for offering that up to our listeners. Certainly appreciate that. And last question for you here. If our listeners want to get in touch with you and learn more about you, what is the best way to.
[00:18:02] Jake Marmulstein: Please add me on LinkedIn, Jake Marmulstein, and also go to our website groundbreaker.co. And if you fill out a demo request form, then we'll be in touch with you and you can go over our software and learn about your business.
[00:18:16] Sam Wilson: Awesome. Jake, thanks for your time today. I do
[00:18:18] Jake Marmulstein: appreciate it. Thanks Sam. I appreciate it as well.