They were both founded by Zachary Maurias. After selling Favor to HEB he then set his sites on real estate. We interviewed him in our new podcast series, Built Piece by Piece. Zac and his partner built Favor out of a garage. With hard work and persistence, it became a sellable asset.
Oh, and with Coding for Dummies. After selling their company to HEB, they set their sites on a new venture – real estate leasing. The entire story of both companies is in this podcast.
About Zac Maurias
Zac and his co-founder, Ben are both from the same small town in New Hampshire. That’s where they grew up and they’ve had quite the entrepreneurship journey over the past decade and change. As the co-founder, he was actually the one that had come up with the original thought for Favor. So he was delivering pizzas out where he had gone to school in California, and said, hey, this is great delivering pizzas from this one place. But what if we could deliver from any place that way? Zac, as a delivery driver, could have more efficient routes and make more money and kind of be his own boss. That was kind of the first thing that got us the bug of entrepreneurship.
Some of these thoughts of like, you know, Uber, or Lyft, they hadn’t started and they wouldn’t start for a bit longer after you had said Uber-like, way back when one of the people that had just got their business off the ground, maybe like a month or two before them was the guy that started Lyft Logan Green.
Zac was finishing up school. He’s gone to school in South Carolina and was poking around thinking about getting a job. Like, like most college grads, and so he was kind of shopping around and was like, no, no, no, stop all that stuff. Come back, we’re going to set up shop in my parent’s basement, back in their hometown, that they hadn’t been living in a while. They didn’t even know exactly where to get started. They had gone to Barnes and Noble a got a coding for dummies book. Wow. said okay, well, we might as well just, you know, learn how to how to try to build some of this stuff. Zac remembers the first problem that they ran into was one book, but a couple of people trying to work on it. So they got a kitchen breadknife and cut the sections up. And exactly can pick up some front-end stuff and Ben’s like, give me that back-end section. Zac was going to learn PHP and MySQL and some of the other things to build out server-side database structure with the startup textbook.
Starting the Business in Austin
Austin was a bit random, says Zac. Two guys in New Hampshire and Ben was going to school out in California at the time. They were trying to do a pilot out in California, in central California, and it being a food delivery. We needed to have a car to do that delivery, and Ben’s car just died. So he had to get his car from New Hampshire, all the way to California.
Zac kept hearing about South by Southwest and other cool things, the tech. So they ended up kind of taking a bit of a longer route the scenic route to get to California. When they were in Austin way back when it was one of the first times that everyone was like, wow, this is going to be something I could totally see how getting tacos and beer brought to you and a click of a button could be a big thing. And they kind of get checked it with the data.
There were lots of college students, you’ve got kind of an emerging tech scene, it wasn’t as big as what it is now kind of fast forward a decade later, but back then they even saw that there was starting to be some of that stuff taking form.
It took them a couple years of having really few resources. The school that Ben was going to gave them a small grant of 7500 bucks. And then they had to raise, like, an incredible amount of kind of friends and family money.
But at the time that they had showed up in Austin, Ben was sleeping underneath his desk, and he lives on yoga mats out in California. So they didn’t have a lot. They had got on later to raise money to help them grow and had raised something around $35 million to scale it. But it definitely wasn’t clear in the early days that that was gonna be a thing.
Zac says that they code by day, be working on the product. And then he always thinks that the best way to learn things is by being on that front line. Get that first-hand knowledge. And one of the most important things for them with that company was to have the delivery drivers provide a really good experience and to get lots of drivers that wanted to have it be the way that they would make money.
So they would code by day and then deliver by night. Zac had done over 500 Favors himself, a few tears to people, after a night out at the bar, or whatever it was and kind of learning was cool, because you would build the feature, and then you would get to use it that night to see if it was working the way that you’d expect it to.
Getting the Word Out About Favor App
They were at an interesting time in digital marketing. Facebook had just had their AdWords or their ads program and then Instagram ads hadn’t even been out yet. They had some first movers of being able to run digital ads on those platforms.
One of the things was they would always try to figure out what were the main food items that people would want in in town. So one of the first ads that really got humming was a Torchy Tacos ad of a taco. It’s like if you would want to see the ad, and it would make you want to lick the screen. They knew that we would have a good campaign running.
Since not a lot of other advertisers for yet, they were using it yet as the distribution channel. There wasn’t as much competition so the cost per sign-up for the consumers was really low. Plus at that time, not a lot of companies and brands were doing things with influencer marketing, and Instagram. And so they were able to tap into that audience as one of the kinds of the early things too.
So he would find influencers in any city and say, hey, we’re doing this campaign with Chick-Fil-A or something, would you like to get some free food, and we’d send them some dinner, and then they would post about it and then tell their audience about a campaign that would have to give free food to people the next day, and they could be the one kind of breaking that news or story.
Zac said that there was a bit of a land grab going on inside of the on-demand delivery space. They thought that it would be important for them to win some big markets like Miami and DC and Atlanta and Nashville. What had happened back then was there were a lot of other companies that were starting to get out nationally, some companies like DoorDash and Postmates. And so the competition in some of these cities was super fierce.
As Jeff Bezos says, your margin is my profit. It’s like the same thing with these other competitors. It was almost like a contest of who’s gonna hold their breath the longest. Some of these guys would go into the city and give out free delivery fees for the first month or two.
It’s like a smaller company, it’s hard to sustain that race to the bottom favor had expanded outside of Texas, they broke out to a handful of major cities, and they’re operating some of the big ones like Miami and Atlanta and Nashville, and DC weaving actually opened up Toronto as a market at one point when they’re doing a pilot with McDonald’s. So they got out to a lot of places, as part of like this, this land grab back then. But what they ended up finding was, as a small company, our money would go a lot further in Texas. So they ended up having to retract in the exit a lot of the cities, and then kind of double down on Texas.
Merchant Partnerships and Onboarding Drivers
Merchants became an important partner as the company grew, they knew it was a natural fit because they had been bringing them so much incremental revenues, but they wouldn’t start off with the partnerships in many cases. Zac found that it was harder to have those conversations with the merchant.
It’s kind of chicken in the egg, says Zac. If you don’t have anything to show yet, they’re like, I don’t want to hear from you. They would actually start without making partnerships. And then the company has scaled quite a bit before we started to have deep relationships with the merchants. They ended up becoming a good natural partner, but it wasn’t till pretty much later.
So kind of similar to what they’re doing for the consumer side, where they would have to run ads, the ads for this one would be all employment-based. So they’d be doing ads on Facebook, they’d be doing kind of content marketing, talking about some of the people that had this as a job. And then they’d be posting on Craigslist, and these other places.
Zac stated they you have to kind of imagine, like, these were pretty big numbers. At the time that we had sold HEB, they had about 50,000 drivers that had signed up, got an account created, gone through training, and people were picking up jobs, from their phones. They had this whole kind of program that they would go through if they wanted to become a new driver on their platform. They had different teams that were working on helping kind of drive awareness at top of the funnel and then kind of filtering people through going through a screening process and then doing different things to get their account set up.
Scaling the Business
There are moments when entrepreneurs think that they don’t know if they can do it and Zac says that he thinks it happens so often with entrepreneurs that they’re trying to push through. There’s one of the things that he and his co-founder says is you have to be foolishly optimistic. And he thinks you do, you have to just always have a positive outlook, you’re going to get through this and get to the next point because it is.
Zac stated that part of it too, though, is at a certain point, they’re almost is no failing, like you can’t give up, you have taken money from other people. And so you have to press on it. And even the types of like, if anytime someone takes venture capital, they’re not they don’t even you know, they’re not looking for the onesie, twosie acts on their investment, you know, they’re in the game of how is this thing going to become 10x from the time that they had invested.
For Zac and his team, it was never even an option to kind of slow slow down or kind of burn it, bring it back in. As soon as they kind of said, hey, look, we’re going big. And that was the other thing, too, is like they didn’t become the category winner but they always wanted to win the space. They just wanted to kind of go big or go home.
H-E-B
H-E-B is this really interesting company, you know, if you’re in Texas, everyone knows about H-E-B, go to other places around the country. And people are like, what’s a H-E-B? mean, there’s such an institution like they are the biggest employer in Texas last time he checked. In a lot of these small towns, they’re the only show in town. You know, they’re, they’re bigger than a Walmart or something like that. People use them as kind of the cornerstone of the essentials for the household. And so have a strong Texas footprint.
They got connected with H-E-B because they wanted to start to do some last-mile delivery. So they had a way to order groceries on-site on the H-E-B site. And they wanted to have someone that could fulfill picking it up at the store, and then bringing it to the customer’s home to make it a little bit more convenient. And so they elected to have Favor, be the partner for that. That’s how they kind of started the relationship.
As things have evolved, it was an interesting time, because Amazon had purchased Whole Foods and you got Amazon, kind of on your turf, you’re gonna be a little bit concerned about what the next, you know, 10 years is going to look like and what the future of grocery delivery and all these other mobile ordering types of things are going to look like.
So it was at that point where they knew that the Favor tech backbone, and the team that Zac and Ben had been establishing was incredibly strong. Anyone who’s hired a lot of engineers, and how to get product designers in and kind of do all of the internal toolings will be like, yeah, that that is a really hard thing to build from the ground up. And he knew that we had it and so that we could be a really good strategic partner, especially with the consideration that we both were so deeply penetrated in Texas.
When it comes to the negotiation, they have been talking, talking for a couple of months just making sure that would be a good fit like a big kind of partnership like that as a marriage-like anything else. It’s a bit of a process.
A lot of people they think like, oh, you know, are you kind of building to sell or, you know, you’re trying to have a company that gets big and profitable and tries to make some money off it, but they’ve never been motivated about those things we just knew, like in pursuit of having a good experience and trying to try to grow that good thing might come.
They didn’t know when it would happen, what that would look like, honestly, if you had told him had years ago that he would be the one that we finally partner with on it? That wasn’t exactly the partner that Zac was expecting, it was, there was a time, it was actually kind of interesting because there’s another retailer target that had purchased another company that was kind of doing some on-demand delivery, this one for groceries called Shipt. And they had a bet a big exit. But again, another retail tech combo, that you wouldn’t really expect the natural fits, but you know, it just worked. And they’re kind of a series of those things. So interesting outcomes.
It was an accomplishment for both Zac and Ben, it was a big deal. It’s life-changing. One of the things that were was special for me was, you know, not only was it life changing for Ben and I and, and some of the early investors that we had, but it was life-changing for a lot of the employees in the company.
There were people that got stock that. There’s this one guy that Zac loved from Favor, he loves it, because it’s, it’s such like a great story of, of kinda like the American dream about how you can just kind of work hard plug ahead, and then have a really great outcome.
When he started with a spin was a full-time pizza delivery guy in that pizza place and then he became their first driver. And then when we had to figure out how they were going to get a lot more drivers on, we turned him into an operations person. As he wanted to kind of grow his career and learn tech things, he figured out how to how to become a business intelligence analyst, and how to learn SQL and these other things. And so we’d always be like that you even he was a city watcher for a little while, and got to go explore all these new places. Then when he sold had, he did really well, and was able to buy himself a brand new house and no life-changing type of thing. And, and there are lots of people like his story. So it feels really good to just have been been a part of that, says Zac.
Moving to A New Venture
Zac stated that a lot of times when there’s a company that’s merging with you, there’s kind of like this golden here hit golden handcuff period that has to happen. They were kind of an interesting place where they had just built out a lot of the kind of other core team members around me and his co-founder, Ben.
They knew that this thing was going to be happening in the not-too-distant future. And so they were kind of making moves to have, that entrepreneurship itch, getting scratched again, so Zac and Ben were talking to each other at night thinking they have this big wind for food.
What’s the next thing you want to work on? And, and so they were talking about wanting to start another company, and we’re kind of going back and forth about what that might look like, and, and they ended up landing on wanting to work on housing because we thought that it was such a big part of the consumer spend wheel people spend a third of their money on housing only a couple percent on food.
They thought that it could be a really big company if you could solve that kind of basic Maslow’s hierarchy of needs to be something, you got like food, shelter, and sleep on that all of those things are, massive categories, and they’re really interested in consumer and because they can impact so many people’s lives.
They’re kind of circling around what are some different things we could work on inside of that. And that was all happening right at the time that they’re selling the company so they didn’t skip a beat. They were we called up some of the people that had given us an investment in Favor that had a good outcome and already had believed in them and said, I don’t care what you guys are working on. We love you. I’ll be your first check.
Building Sunroom
Sunroom is a leasing-only brokerage that’s using technology to make the process of leasing homes and apartments a lot easier. So Sunroom partners with busy agents, and brokerages to do all of the legwork involved with getting a tenant for a property. That could be anything from setting up the yard signs to processing applications to helping to have tours get facilitated. Everything involved with the leasing, and we’ve built out apps and in tech so that you can follow along and see how that whole process is happening.
When Zac and Ben were taking what we learned about tech, and a big part of that for Favor was how could you add a lot more transparency into this process? And thus make a better experience. When you kind of think about the food delivery thing, where’s my driver at? When are they going to be at my house? What’s the contact info for that driver, knowing that info really takes this huge burden of stress off your shoulders. Because you know what’s going to happen? The same is true with leasing.
Leasing is a really long process. There are lots of offline things that are happening and they wanted to add transparency in that process. Who’s this for? What does it actually do? So Sunroom has talked to lots of agents, and they just talked to them about what are some of the pain points that they have, and what kept coming up was like leasing takes up a lot of my time. I’m only gonna get, you know, a small amount of money when you kind of look at it permission shack, as opposed to selling the house. It’s almost the same amount of work, but it’s like a 10th of the pay for it.
They kept saying, I do the leasing because I care a lot about my client relations, and I want to look really good with that client, and just totally kick butt for them. But it’s just so much work. So Zac said, well, how can we kind of chip away at that work, but still give all the credit to the agent? And so that what they’re doing.
Agents are so busy, they’re out doing showings, they’re doing paperwork, they’re out on their phone, they’re on the go. What they did, because of that was they built an app that they can log in, have their own account, and they can kind of log right in and give an address and say, hey, Sunroom I get to work on this thing, and then notify me, you know when there’s an application for me to review and approve. That’s what they can do and they get notifications for every step in that process.
How Sunroom Works
Zac wanted to make sure, they know that client relationship is so important, and every agent has different types of relations with their clients so some people are very protective about that. They wanted to enable them to have all the info filter through them and completely be the face of it, and not interfere with that. And then other people are like, hey, look, I’m too busy, I don’t even want to deal with it, like you work directly with this owner. It’s kind of more like a pure-play referral type of thing.
They built outflows for both of them so that they can accommodate both use cases. And then all this stuff, too. It’s all branded to that agent, it’s their logo, it’s there. It’s kind of like their tech platform. They’re trying to build up that client relation like the fact that the agent can share that portal link to their property owner.
Now the property owner doesn’t have to be calling you every weekend. Hey, did you have any showings? What are the renters thinking about it? Is it priced right? You can just share a link with them and then they can get real-time info on this stuff. And it’s all on the agent. White label. It’s not about us. It’s about the agent.
Professional Photography for Sunroom
Zac says that they take the photos, they’ll do that legwork on that offline stuff. It’s all included in the service that they do. Like the agent wants to be very knowledgeable about anything so they’re never blindsided, and they can talk eloquently with their client, to give them the exact status on things.
If an applicant applies, and they’re talking through, if they should accept them, you know, they’ve got all the data, they’ll know exactly what the credit scores and exactly what that eviction report says or exactly what that reference for the landlord has, or their employer. They get all of the data, and then, then they can just have very well-informed conversations with the property owner, when they’re advising on, on, on what to do.
Property Management
There are so many T’s and eyes to be dotted and crossed. And there’s, there’s a lot of regulatory risks when it comes to processing applications because there are so many best practices that have to go into play for kind of every step in that whole process.
They’ll make sure that that’s happening, they’ll make it you know, a really seamless flow from a compliance perspective, make sure the right forms are happening, make sure that the right application processing procedures are happening.
It’s good for new agents that want to learn that process and see the whole thing through and then it’s also really good for the agents that maybe they have a ton of product process, they don’t like the back of their hand, but they’ve just graduated from leasing and they’re just so busy with sales and so they’re almost the more intuitive fit for it. Zac thinks it’s a good point that the newer agents are also to benefit.
Where Can You Find Sunroom?
They now have leased more properties than anyone else in Austin was the first city that they’ve kind of been having their backyard proving ground. They just opened up San Antonio and Houston as the next cities and now they’re on their way starting to get going on there and have had picked up a good amount of clients.
The next city that’s on their radar is going to be Dallas and they’re hoping to get out there you know, by the end of the year or maybe early next year. Zac thinks that could be another great city with a lot of potential so they’ll want to prove out Texas as the like kind of the next year plan and then we might start to plant the seed in another state. That’s not Texas to kind of like Atlanta or Chicago or something like that so that we can start to work on the next place.
Connect with Zac Maurais
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