L.D. Salmanson, WG’13
“Maverick Herder” (CEO) of Cherre
L.D. Salmanson, WG’13, immigrated into the United States from Israel on a Joseph Wharton Fellowship. He entered school with a rare clarity about his goals, as well as how and when he would accomplish them. That put him in the position to create a successful business and give back to future Wharton students.
What is Cherre?
Cherre is a real estate data collection and resolution platform for large enterprises. Our clients are mostly banks, insurance companies, large multiple listing services, hedge funds and mortgage-backed securities companies. They consume data from thousands of data feeds from multiple sources, in real time, and spend millions of dollars and endless man-hours to make sense of the data.
What kinds of data?
Public data such as permits, violations and past transactions; subscription data like foot traffic and internet searches; and internal data, such as CRM or research data. We collect all the data, resolve it for clients in real time and create a single source of truth in an API format.
Can you give an example?
For the New York Metro market, Cherre has over 100 million data points from thousands of sources. One client, Real Estate Board of New York (REBNY), has 1,500 internal feeds coming from residential and commercial brokerage firms. REBNY has feeds that it pays for, like demographics and maps, subway data, and traffic feeds, and it has another 200 or 300 public feeds providing construction permit requests, certificates of occupancy and violations. REBNY used to pay a team of data engineers and analysts millions of dollars to take that data and put it into one usable form, which is very hard to do. We solved that for REBNY. Today, all that data comes to our platform where we resolve it and produce one accurate data stream for REBNY’s 17,000 clients.
Another client is one of the largest property-and-casualty insurance companies in the U.S. Let’s say a customer of the insurance company asks for a quote in real time. Perhaps the customer just bought a home and wants to purchase homeowner’s insurance. Typically, since this customer’s data is incomplete, the insurance company lowballs the quote. In which case, it may lose money because it should have charged the customer more, or it overprices the customer, and the customer leaves to a competitor. Cherre’s core competency is helping clients connect large amounts of data in real time. We mesh the data together into one stream — that’s the magic.
Better data means better decisions. For example, Zillow has a team of 50 data engineers on a project called Zestimate. Zillow launched a competition to pay $1 million if you can improve its algorithm. Zillow claims that 80% of the time it is within 20% of the closed price. If we were to run our verified data through that exact same model, then the variance drops to plus or minus 5%. Better data gives a better return than a better algorithm at some point. Diminishing returns may have been reached on algorithms but not on data.
Incorrect data could be the wrong number of bedrooms, or a transaction that was an inside deal?
Yes. Even public information may be off. The NYC Department of Finance gives one size for a lot, which is the basis for taxes. The NYC Department of Buildings gives another size for the lot, which is used for zoning. And often, they are both different from the actual size. We spend a lot of time researching and taking data from many sources in real time, to answer which data source is accurate for what purpose and when.
What is the importance of real time?
The data going into our pipeline is collected in real time, and our clients need our output to be in real time for them to make real-time decisions.
So, yes, many aspects of real estate are fixed, but other critical data can change quickly. Mortgage-backed securities are priced mark-to-market. Also, internet search traffic on a property, weather, crime, foot traffic and risk — all these can change in a moment.
Let’s say a plumbing permit was filed for a building yesterday. What does it mean? We don’t know, but the insurance company wants to know before it gives a quote.
You entered Wharton with a clear goal and strategy, which you executed.
I entered with a goal to help large investment firms, like Fidelity, T. Rowe Price or Putnam, collect data from public, private and internal sources, to make better investment and underwriting decisions for private companies.
To accomplish that goal, I wanted an education that would be relevant. I waived the entire first-year core and replaced it with the most advanced finance and technical classes around financial derivative products, repo markets, asset management — things I knew nothing about. By the time I graduated, it wasn’t like I knew these subjects perfectly, but I knew which questions to ask.
Second, I sought out the best network of mentors and influencers, like Professors Eric Bradlow and Adam Grant, who could help me to build out that idea and attract talent. By the summer of my first year, I joined a company as co-founder to help large pre-IPO companies like Facebook and Twitter raise capital from large investment firms in alignment with my goal. Our company was acquired 18 months later by Oppenheimer & Co. in 2013. Then I co-headed Oppenheimer’s Private Shares Group for another two and a half years.
How did you start Cherre?
I wanted to do the same for real estate what we had done for private equity, and as a director of a strong group at Oppenheimer, I thought it could be done inside the company. However, I really felt a passion to focus solely on this new project. So, I asked my friend Ben — who I had known and started companies with since I was 14 — if he wanted to join me, and we started two years ago.
Today, we are 17 people, each the best at what they do. The author Hunter Thompson once said, “At the top of the mountain, we are all snow leopards. Anybody who can do one thing better than anyone else in the world is a natural friend of mine.”
My job is to find people who can do one thing better than everyone else. I have guys who can’t put together a full sentence, but they are excellent at the job I need them to do. My job is to find mavericks and to herd them into one place to accomplish our work.
Talk about being a Joseph Wharton Fellow.
I didn’t have to do much as a fellow. I was required to keep a high GPA and attend a dinner the first year. Since the fellowship included a scholarship, I have since been very active in giving back to Wharton, as I’d like as many people to have the same opportunities that I did — primarily, to be able to take risk!
What’s your immigrant advantage?
I grew up in Israel. I came to America to attend Wharton.
There’s a reason that Israelis are successful in technology startups. They can code from an early age in school and continue to receive training, even in the army. Culturally, I think we are natural entrepreneurs because, at our core, we’re irreverent. An Israeli will go to a corner with three pizza shops and say, “You know what we’re missing? A fourth pizza shop.” After Talman Marco sold his company Viber, he came and saw Uber, Lyft and two other ride-sharing services. He decided to start a fifth one, which he soon sold to Gett for $200 million. That irreverence is something like bravado.
This is a true story. I was returning to the U.S. from Canada and coming through immigration. There was a long line on the right, and nobody lined up on the left. I ask myself: “Why is that? I went up to the border control officer on the left and asked, “Why isn’t there anyone in this line?” He said, “I don’t know!”
On the other hand, Israelis are extremely reverent — “I know I don’t know anything. I come from a little swamp in Israel.” We may not project humility, but I know I’m this little speck of nothing in this giant land of opportunity, where so many others are accustomed to this battlefield.
The third thing, which is rare, is that we’re not afraid to fail. It’s a little easier when you have nothing to lose. We’re shameless — “I know everyone’s failed before me, but I’ve got this.”
Nobody remembers your failures. They only remember your success.