A Student of the Real Estate Game


I Have a Hunch

Apr 7, 2012 | Entrepreneurship

I was reading a blog post from legendary Venture Capitalist Fred Wilson and I came across an interesting quote;

“Start-ups should be hunch-driven early on and data-driven as they scale”.

While he was speaking generally about start-ups, I thought this quote tied directly to real estate deals.

Today we have more information at our finger tips than we can handle. However, just 30 years ago, investors and developers didn’t have reliable sales and rent comps, population forecasts, business trends, or demographic information. They did deals entirely on a hunch.

Successful investors/developers could see trends before others could. Entrepreneurs such as Taubman and Simon saw the future of retail and Barry Sternlicht understood what the modern business traveler was looking for in a hotel.

Today, while we have all this data to help us recognize trends, identify new markets, and determine product focus, deals are largely hunch-driven at first and then data-driven as we begin our due diligence.

I have a hunch that there would be huge demand for a co-working space directed towards tech entrepreneurs in Midtown South. While my hunch is based on all the tech companies that have moved into the neighborhood coining the term Silicon Alley, I need the data to support the investment.

Fred went on to say that the profile of the entrepreneur that has good hunches often come from outside the domain, yet are obsessed with the opportunity to disrupt the new field with a fresh perspective.

What do you think?