The Wall Street Journal’s Rebecca Buckman published an article yesterday depicting Redfin as the oddball on an ad-crazed Sand Hill Road. Which is unfortunately true.
When we were meeting investors about our last round of financing, three huge deals for ad networks had just set venture capital abuzz: Microsoft bought aQuantive for $6 billion, Google bought Doubleclick for $3.1 billion, and Yahoo! bought RightMedia for $680 million.
Eager to capitalize on the trend, many potential Redfin investors seemed genuinely shocked that Redfin doesn’t run any ads whatsoever. Serving customers directly via flesh-and-blood agents, rather than simply sending them from our website to a traditional brokerage — this is a much messier business than running ads.
Yet having come to grips with this fact, investors couldn’t stop asking about “page views,” as if there were no other measure of a website’s success than how many ads it could have served. This page-view fetish is the reductio ad absurdum of the ad-driven mentality: a “page” after all is just a component of a web application, and a “view” is the most passive way to interact with that application. By measuring web applications in terms of page-views, we lose sight of what the application is supposed to accomplish, which in our case is the sale of a home. (We try to accomplish that goal with as few page views as possible.)
The circularity of the quest to generate page views perhaps explains the anomie behind many ad-driven Web 2.0 businesses. My friends at these businesses sometimes seem not merely daunted, which happens to all of us, but occasionally uninspired. Silicon Valley has gone from taking out the middleman to being a middleman, hoping to waylay users at a website before passing them on to a business that hasn’t changed at all how it serves customers. Travel sites like Kayak have become portals to other portals like Orbitz. The Web is becoming a gigantic lead-generation contraption for business-as-usual. It’s hard to get excited about that.
What’s funny is that Silicon Valley still thinks of itself as the swashbuckling foe of traditional industries, but every day it’s becoming more like Madison Avenue, minutely sensitive to traditional advertisers’ needs, and unwilling to rock the boat. The two used to be miles apart: Madison Avenue wants only to entertain you long enough to implant the urge to buy a Pepsi; Silicon Valley used to want to change the world. Now no one at an ad-driven real estate website can breathe a word about whether the real estate industry needs change.
And maybe they shouldn’t. It can seem naive or self-important to think that a business should have any purpose beyond making money. Yet many of the businesses most successful over the long haul — Apple, Hewlett-Packard, Sony, for example — have been built around a sense of purpose that motivates employees, appeals to customers and simplifies decisions. Nothing endures as well as a purpose.
And without some purpose, Silicon Valley will lose the fervor that once propelled us to build great companies. Of course Redfin is hardly great now, but we aim to be great. Our purpose is to use technology to put consumers in charge of buying or selling their home. This is the most valuable change we can offer the consumer. We hope that it can lead to our becoming the most valuable company in our industry.
If this makes companies like Redfin neither fish nor fowl, with real estate agents working alongside software engineers, then perhaps we will be the first awkward creature to stagger ashore on our own two feet, hopefully into a slightly better world.