TheMReport

16 | TH E M R EP O RT COVER STORY and data scientists to provide the latest in machine learning, predic- tive analytics, and technological products for its clients. The Problem F or the majority of Americans, a home will be the largest investment of their life. And to determine the importance of residential real estate's role in the overall economy, we need to look no further than the Great Recession, where the bursting of the housing bubble caused a national crisis. Like most analysts worth their salt, Sicklick has spent time exam- ining what caused the instability in the housing market leading up to the Great Recession. His con- clusion? Bad and incomplete data that led to valuations that didn't reflect market realities. "What became apparent to me was that for the largest industry in the United States, the data that was available was too limited to make critical investment decisions," Sicklick explained. Sicklick's knowledge of the problems caused by inaccurate valuations is more than just aca- demic. "When I went to refinance my house during the downturn, my bank told me the value of the home was significantly less than the value that I knew it was worth," explained Sicklick. "They told me I would have to put in $200,000 to refinance at a lower interest rate because of what some web site they were looking at was telling them. I knew there was something wrong." With a background in stra - tegic advisory, including an MBA from the Wharton School and as a Partner and Managing Director at Boston Consulting Group—Sicklick couldn't wrap his head around how advisors could know the minute details of other consumer products but come up empty when it came to one of the largest asset classes in the U.S. "We knew everything about deodorant, and how deodorant was going to trade on a specific street corner based on weather patterns," Sicklick joked. With the problem plain for Sicklick to see, all he needed was a partner to help him work on a solution—as fate would have it, he would soon cross paths with Stroud, who could help him take his ideas to the next level. The Partnership T he path to the creation of HouseCanary started when Sicklick began to dig deeper into how to take the data that the industry understood, and use it to fuel better forecasts and decision making. "I got really enthralled about Bayesian statistics, and was try- ing to basically solve a forecast- ing problem because at Boston Consulting Group we were helping companies deploy capital every day for real estate. I thought if they could forecast with ac- curacy who was going to win the presidential election, why couldn't we do something similar for forecasting real estate?" explained Sicklick. This interest in Bayesian sta - tistics led him to the University of Texas at San Antonio and Dr. Keying Ye—and a researcher on his team, Chris Stroud. "Stroud was this amazingly sharp guy and we started to figure out how to forecast for five major markets. Then we took it to 50. Then we said, how do we do this nationwide? That is how I met Chris. He was not only a researcher but a developer and was cracking the code of where real estate was headed." For Stroud, the lure of becom - ing his own boss was too strong to pass up, and he immediately jumped at the chance to part- ner with Sicklick, even though "What became apparent to me was that for the largest industry in the United States, the data that was available was too limited to make critical investment decisions." —Jeremy Sicklick, CEO, House Canary

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