John Cook Interviews Redfin CEO: Redfin is "crazy-good"

Dustin pointed out that John Cook over at the Seattle PI just published an interesting interview of Redfin’s CEO, Glenn Kelman (Direct link to the mp3).

Before I jump in, I should point out that I run, a site that is faintly a Redfin competitor. That said, that both Redfin and ShackPrices are much more worried about our customers and competitors with lots of money than we are about each other. I’ll try my best to stay unbiased.

Up to this point, Dustin has been under the impression that Redfin is very insular (He’s even gone so far as to say “arrogant”). I get the impression that Redfin has some interesting technologies, but they are still looking for their path; Glenn is doing a big marketing push on a site that has only had cosmetic changes (to real estate buyers) in the last year. Throughout the interview he raves about his site. I think he says exciting ten times and “crazy-happy” or “crazy-love” at least three times. If you check, their news bar clearly shows that they’re on a marketing push (it also shows they still don’t have an interface person who can tell them to use that valuable space more effectively).

Glenn then talks about how addictive (crazy-addictive?) he finds the Redfin site. Personally, I get much more excited by the technologies behind PropSmart and Trulia. Those sites seem to have added to cool aerial photos with some real focus on the user interface. Redfin gives you great information about individual houses and even shows you the lot line, but it doesn’t give you any medium- to big-picture information. Neighborhood and city pricing information is worth much more than a single house’s historical sales (and this is coming from the dude who has only historical sales on his site).

I think it is interesting how an interview can really bring out the best and worst in somebody by just letting them talk. More articulately than anyone else I’ve heard from Redfin, Glenn describes the company’s lack of focus. For instance, he talks about how every state is different and national websites can’t accommodate that. Next, he talks about how he’s going to expand down the West Coast and all over the country. He talks about how cool the site is and how technology is changing, but gives digital photos of houses as an example of this trend (that was cool 5 years ago!). Even in vegan-city Seattle, I want to know where’s the meat to go with this fluff? When asked what’s driving traffic to Redfin, Glenn says “because it’s an awesome site.” I think I would have gone with “aerial imagery, property outlines and past sales data.” And if they don’t add to that list, they risk becoming just-another-mapping-site.

A while back, Anna wrote this article that showed how Redfin wants it both ways with real estate agents… and it is interesting that while Glenn is new to the staff (he started in September), he inarticulately describes this same conundrum that Redfin faces.

He says,

we’re not trying to serve the real estate agents… sell people out to real estate agents… what we’re trying to do instead is serve the consumer directly…

But when pressed by John about how Redfin makes money, he says

How do we make money now? People sign up for a real estate agent… The real estate agent and Redfin share the fruits of that.

Which essentially means “by selling customer names to agents.” I’ll give him credit – I hate the housevalues model and find it to be really sleazy and maybe there really is something to be said for waiting until someone requests an agent. However, they are not, as he says, “trying to do something totally different.” Redfin is just leaving more money on the table and, possibly generating higher-quality leads. I’m going to read into this, though, and say that they don’t plan on working with agents for long – note his question to himself “How do we make money now?

Dustin says “it is not hard to read between the lines that he’d really like to squeeze those agents out of the business if only it wasn’t for those “great” relationships he’s built up with a few of them.” I agree. Late in the interview he emphasizes how he wants to balance the business model:

… balancing our business model. We’ve got real estate agents that are partners, that we still value enormously, but we want to make sure we keep the focus on the home buyer and seller who is the customer.”

Word to agents: now that we have funding, you are not a priority.

This is my favorite part:

If you walked into Redfin, all you would see are engineers and a customer support person.


12 thoughts on “John Cook Interviews Redfin CEO: Redfin is "crazy-good"

  1. First, thanks for your comments on the interview. I can’t quibble with your complaints about my goofy style, except to say that we’re sincere in our enthusiasm for Redfin’s current site, and in our commitment to making it even better.

    I also agree with you that it’s important for Redfin to be clear about its strategy. Our strategy is simple: we believe in customer choice. Many customers will want to work with a traditional real estate agent. Redfin connects those customers with a partner. It is important to us that customers choose to work with a Redfin partner, rather than being turned over to an agent before they are ready.

    And yet everyone in the industry recognizes that some customers may want different levels of service, with more services being delivered electronically all the time. Redfin is open to this possibility. We will not require our customers to work with our partners, just as we do not expect our partners to require their customers to work with us.

    This does not to us seem two-faced. No one accuses a pizza parlor of being anti-pepperoni, or of being two-faced about its pepperoni service, simply because it offers customers a choice of pepperoni or no pepperoni. Any business service, even one as important and valuable as a real estate service, is a matter of customer choice.

    It hardly seems controversial to say that there may be other customer choices, and that we will support those choices as well. This is what we mean by a customer-centered strategy.

    Thanks again for your comments.


  2. Glenn,

    Thanks for the wonderful feedback…

    I think that more than anything else, a lot of us are frustrated with Redfin because you guys have such a great idea, a year jump on the competition, and yet, it seems that you guys are playing catchup at this point.

    One of my very first posts on Rain City Guide was talking about how much I enjoyed Redfin… I loved zooming around Seattle and checking out all of the wonderful information that you made available. I even had some contact with David Ecker and Savan Kong in a hope that we could somehow work together to everyone’s benefit. But instead, I only got the feeling from Redfin staff that they loved it when I complimented their site (who wouldn’t?), but didn’t want to hear about any ideas for improving their site.

    By the way, I did enjoy the enthusiasm you displayed in the interview and I think it bodes well for Redfin that they brought you on board.


  3. Glenn, I agree with you that allowing customers to pick agents and get agent information when they ask for it is immensely better than forcing agents on unsuspecting victims. I think this is a much better strategy for connecting with the public. So I apologize if I conflated your strategy with that of I wish you the best with this approach – it is the nobler of the two.

    I guess my complaint, which I didn’t really come out and say in the write up, is the same as Dustin’s: where is the innovation? Redfin seemed so promising when it was introduced, but since then 20 sites that do nearly the same thing have sprouted up. I realize this really has nothing to do with you – you’re new, so I look forward to seeing the innovation you bring to the site in the coming year.

  4. Galen,

    Great read you guys…. I love the polite battle!

    Hopefully I will have some juicy details from some inovator here at the Inman real estate connect confrence to report soon!

  5. Well, Giles, I’d take Redfin success over some non-Seattle real estate mapping company any day. And I’d take anyone’s success over that of housevalues.

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