Mizzou Founder Features: Nick Farquhar

In this week’s edition of Mizzou Founder Features, we shine a spotlight on Nick Farquhar, the Co-founder, CEO, and driving force behind Appreciate, an idea that originated at a Missouri Startup Weekend in 2022 and is now changing the landscape of multifamily asset management. Not to mention, they are growing nine times faster than the average company in the industry. Headquartered in Columbia, Missouri, Appreciate offers vertically integrated asset management software and services. Their mission is to increase operational efficiency in multifamily properties through transparent, actionable data and a centralized portfolio command center – essentially becoming the Carfax of real estate.

Nick spent most of his childhood in Pella, Iowa, a town of about 10,000 people. Growing up there largely shaped how he sees the world and how he runs his business. He believes in focusing on what truly generates value: making progress, getting things done, and building strong relationships. If you visit his company's website, you'll notice it's remarkably simple. That's because Nick believes that actions speak louder than flashy designs. Even outside of work, he keeps it simple. He drives around in his trusty old truck and sticks to his down-to-earth roots. He's not a fan of big-city startup scenes and prefers to keep Appreciate tight-knit and focused with just nine employees and hiring contractors as needed.

Before starting Appreciate, Nick attended Mizzou from 2017 to 2022, studying finance and banking. However, his true passion was in entrepreneurship, prompting him to drop out of college… twice. In 2021, he and a group of friends launched the 4impact program. This initiative aimed to support startups dedicated to social causes, offering mentorship and workshops to students from various universities. Through programs like the Mizzou Collegiate Entrepreneurs’ Organization, Nick connected with local business owners, reinforcing his belief that entrepreneurship trumped traditional employment. He jokes now that it was evident that working for someone else wasn’t for him when he lost his first college job as a district office representative after outsourcing his tasks to someone on Fiverr from Bangladesh.

After launching two businesses and later a tech startup, it was clear that for Nick, the real value lived beyond the classroom. In 2020, he started Mister Green Power Clean, specializing in home exterior cleaning. Within just two years, the company's revenue reached six figures, and Nick was at the point where he had several employees and could mainly focus on operations. He notes that the most important thing he learned running this business was the art of cold selling, saying there’s nothing like doing door-to-door sales. In 2021, at just 20 years old, Nick began growing his real estate portfolio by acquiring several multi-unit properties, calling it Elate Real Estate. It was during this time that the concept for Appreciate began to take shape as his experience and frustrations with property management kept growing.

It's Startup Weekend 2022 - imagine Nick, a 21-year-old almost two-time college dropout, already with two successful businesses under his belt, facing a common frustration: property management sucks. He’s scrambling to piece together a pitch in his head as he walks up to the podium. He proposes a tenant scoring platform based on the tenant’s record (e.g., payment history, time at each residence, maintenance requests, etc.), which would enable property managers to dodge bad tenants - a problem that he had been struggling with while managing Elate Real Estate. For tenants, this platform promised easier access to new properties.

2022 Startup Weekend

Throughout the weekend, Nick and his team got a handful of people to sign up for Appreciate, giving him a significant edge. His efforts paid off when his team won the competition among eleven competing teams. This victory was more than just a cash prize of $1000; it opened doors for Nick by granting him entry into Redbud VC's (formerly Scale) accelerator program. The name "Appreciate" reflects the concept that the key to maximizing asset value lies in retaining top-tier tenants by showing appreciation for their loyalty and reliability.

By 2023, Appreciate had reached six figures in ARR. By the time they were ready to raise money, they were already racing ahead, attracting customers, expanding their network, and experiencing rapid growth. Nick highlights the pivotal role of the accelerator program at Redbud in amplifying their network effects. With mentors like Brett Calhoun and Jai Malik, they fine-tuned their startup from a venture capitalist's perspective. This ecosystem in Columbia also facilitated the recruitment of COO and Co-founder Brad Siegler, who had previously co-founded Equipment Share.

Nick Farquhar and Brad Siegler

Nick and the team soon realized that there was a larger problem underlying tenant turnover, and that was the incentive structure between property managers (PMs) and real estate owners (REOs). In short, property managers were profiting big time from this turnover, causing major losses for real estate owners. To address this, Appreciate shifted its focus to developing REO-centric software that provides insights into all operational activities and metrics, helping REOs avoid unnecessary spending on property management. Despite initial hesitation about seeking venture capital funding, Nick connected well with Dundee VC and secured a $700,000 investment, even though they were offered $1.7 million. Redbud VC also invested seed funding in late 2023. This strategic growth is something Nick is thankful for, advising young entrepreneurs not to raise money or expand their team until it hurts.

“This was a lesson I learned along the way - what jobs had value in hiring and what jobs didn’t. Don’t water yourself down. Hire your weaknesses so you can 10x your strengths.”

He also advises first-time entrepreneurs to be as honest as possible with themselves and realize that “Your highs are never as high as you think they are and your lows are never as low.”

With over 150 small multifamily units across Missouri and Kansas City and $15 million in assets under management, Appreciate is shaking up the real estate scene and changing the way asset management functions traditionally. A stellar team and Nick’s ability to uncover gaps in the current system have propelled Appreciate to incredible milestones—operational profitability, a solid portfolio, and a focused business model. As they fine-tune operations and continue to crush their goals, it's clear Appreciate is primed to redefine the industry.

Nick's rapid progress in entrepreneurship is proof that age doesn't hinder success. For those blazing their own trails, Nick offers some wise words:

Share your best piece(s) of advice for current and aspiring entrepreneurs at Mizzou.

Avoid much of today's "entrepreneur culture" like the plague.  All of the Instagrammable #entrepreneur #grindset 🚀🚀 stuff is ZIRP bull*** and essentially playing house.  Add value first, money is the byproduct, not the goal.  The unsexy truth is that most of the best businesses are very boring, execution matters most, and real problems don't need to be sold.  Try to balance new strategies that lack wisdom with old truths that lack modern context when formulating your idea.  Do what others are doing, but better.  Solve real problems and you should probably start with a service business in college to minimize cash investment as you figure out the basics.  One of your biggest advantages is access to cheap college service labor and an abundance of time.  Everybody wants to help a college kid pay for tuition, so use that in your pitch.  Don't over-intellectualize making money, there is a reason that most very successful business owners are not flashy or particularly academic in their approach.  Start small and figure out the business truths before you try to change the world.  The easiest way to go from 0-1000 is to start with 0-1. (I did not follow all of my own advice here so take it all with a grain of salt!)

Can you share one of your favorite quotes?

"To go wrong in one's own way is better than to go right in someone else's.” - Fyodor Dostoevsky

What would you say if you could sit down with freshman-year Nick?

Failure doesn't matter at all, figure out how to add value in the areas that interest you as aggressively as possible while getting great at bouncing back.

What's the most adventurous thing you've ever done, either in business or in your personal life?

Going all-in on Appreciate is certainly the most adventurous thing I've ever done.  I dropped out of college to bet on myself and this idea, and regardless of the outcome, it is a high-stakes enough game to keep me interested!

Share the title of a book or two, or a podcast, that you would recommend to any entrepreneur.

Note: Read more great works of fiction, business is just people and old truths, and great novelists like Dostoevsky or Tolstoy will give you an edge compared to the 400th Hormozi Instagram reel.

Crime and Punishment by Fyodor Dostoevsky. This book is all about poverty and the mindsets that diminish man.

Man's Search for Meaning - Viktor E. Frankl. Nothing matters without a why.

Am I Being Too Subtle? - Sam Zell. Masterclass in cutting BS and the mind of a real estate great.

Thank you! Tune in next week for a new Founder Feature!