The difference between success and failure for a retail store or restaurant can come down to one factor: location.
That makes site selection a valuable science. It includes reams of paper filled with so much data, it's impossible for the human mind to grasp it all.
But the executives behind a Tampa technology startup believe they've found a way to bring that data together, and pair it with real estate services. The firm is SiteZeus. Keenan and Hannibal Baldwin, brothers behind private equity company Baldwin Beach Capital, founded SiteZeus with programmer Azad Ratzki.
“There's plenty of software out there that can provide you with raw demographics and mapping,” says Hannibal Baldwin, CEO of SiteZeus.
SiteZeus goes deeper than finding available land and seeing if it would work for a restaurant or store. The firm's software, instead, can predict what parts of cities and communities would be best for that business, and look for what land could be made available to make it work. Information like that is clearly a premium piece of data.
After months of beta testing, SiteZeus officially launched May 18 with its first official client, Fort Worth, Texas-based Fuzzy's Taco Shop, which will soon expand into Sarasota.
SiteZeus, in addition to its technology, has another early asset: A $2.2 million investment from Outback Steakhouse co-founder Chris Sullivan. That's money, plus validation and connections. Sullivan, for example, hooked up SiteZeus with the PDQ restaurant chain founded by his former Outback colleague, Bob Basham. PDQ was part of SiteZeus' beta.
Sullivan also helped SiteZeus connect with Richard Renninger, chief development officer of University Park-based First Watch. Renninger is now on SiteZeus' advisory board.
Sullivan, who opened an entire restaurant chain using the standard site location model, realized quickly how much better those individual locations might have done by analyzing data before picking sites. (It doesn't hurt that the Sullivan and Baldwin families have had a long personal friendship.)
Beyond relationships, technology is what will likely drive SiteZeus' success.
Most site selection work is driven on a pass-fail method. Companies will find a few parcels of land, and run it through a matrix to see if it works for the business or it doesn't. The SiteZeus model doesn't need specific parcels to explore, Hannibal Baldwin says. Instead, it can look at broader areas and regions, forecasting not only if a business might be successful in an area, but by how much.
For example, SiteZeus collects data from a number of sources like credit card companies and even Google. It considers things like visibility, parking and nearby competitors and locates areas where a sports bar like Hooters might want to open.
“It's a wealth of data so vast, that not even a very intelligent human has the capacity to process it all in his head,” Ratzki says.
The SiteZeus software is so powerful that businesses can look for parcels beyond what might be immediately on the market. That convinced Baldwin to take SiteZeus a step further, and add brokerage services.
Clients start with SiteZeus to find strong locations. If they add brokerage services through the company, they get to use the software for free. If the client doesn't want brokerage, then the pricing model is based on growth -- typically $1 per built square foot.
SiteZeus has seven employees, primarily for management and technical work. The company also hired Calusa Partner founders and real estate brokers John Fahey and Tyler McRae to lead the brokerage side.
Even with the addition of Fahey and McRae, SiteZeus will remain focused on partnering with existing brokers in strong real estate markets nationwide. It will only bring brokers in-house when needed.
“We're going to change the landscape of site selection from reactive to proactive,” Baldwin says. “We're reinventing the entire process, and soon everyone else will have to catch up to us.”
Follow Michael Hinman on Twitter @BizTampaBay