Archive for December, 2007
December 23, 2007
The credit meltdown took a strange turn when Sallie Mae lost $3 billion in market value after an apparently ad hoc Wednesday conference call between CEO Alfred Lord — who had already begun selling his own stock — and analysts. The New York Times described it as perhaps the worst performance since Enron CEO Jeffrey Skilling called a financial analyst an anus for having the temerity to ask for a balance sheet.
Among Mr. Lord’s choice responses, as selected by the New York Times:
- Responding to his first question, on how Sallie Mae would restore its credit rating: “You’re talking to the wrong guy… I don’t know that answer.”
- On announcing a shareholder meeting next month: “I would suggest maybe you get there early because I can assure you, you will be going through a metal detector.”
The best exchange that the Times did not have space to cover was a question from Bill Cavalier of Société Genéralé, who had to explain to the CEO how banks sell Sallie Mae’s loans, and why financial analysts would want to know if there’s a market for selling those loans.
Cavalier: …you’ve got to give us some guidance, you’ve got to give us some numbers. I don’t even see a margin number here for the stuff that you’ve done. Can you give us some handle on what your stock is worth?
Lord: You should give Steve [McGarry, Managing Director Sallie Mae Investor Relations] a call.
Cavalier: But you’re the CEO. You’re the guy who just took over the company.
Lord: Yeah, that’s exactly right. I’m the CEO. You should give Steve a call. Next question.
The call ended with the operator asking if there were more questions, followed by Lord saying, “How good is this? Steve, let’s go. There’s no — no questions.” Then came the expletive.
Thanks to a Friend of Redfin for sending us the New York Times article, and to all our friends who have supported us in 2007. Happy holidays!
Bonus link: Redfin co-leads a USA Today story about real estate and the Internet.
December 17, 2007
Thanks to everyone for their kind words about Redfin’s appearance on “Today,” which broadcast on Friday our data-driven guidance on how to sell a home more quickly, for a higher price. We showed up in the local papers and the blogs. Another food-fight broke out with the real estate bloggers. But mostly people have asked what it was like to be on the show. Here is our starstruck eyewitness account…
The segment was scheduled to run at 7:40, and the producer asked me to arrive by 6:50. Outside the Today studio it was festive: there was a gigantic Christmas tree, and traces of snow still on the ground, and a crowd of tourists, and a security guard manning a velvet rope. It was windy and cold. Inside there was another security guard, and — what a thrill! — another velvet rope.
The green room was just around the corner. The carpets were comfortable and worn. I was alone with two production assistants who were surfing the web on an ancient computer and watching the show; the food was plentiful: doughnut holes, egg sandwiches, cookies, bagels, granola bars, a plastic bowl of cut fruit. The place was crammed full of newspapers and televisions, all tuned to NBC. “Mind if we see what else is on?” I asked. They shook their heads.
A contingent of cooks showed up with a truck-sized slab of beef that they were going to prepare on the air. Since it was so early, I asked the PAs if they ate the food from the cooking segments and they said, “Oh yeah.”
The mood was unruffled. Brian Boitano was in the building, and somebody said, “It’s Brian Boitano.” Julia Roberts appeared just after Redfin, but her segment was taped the day before. Unlike “60 Minutes,” which was as highly charged and carefully wrought behind the scenes as it was on camera, “Today” is sunny, relaxed and fast-paced. It is after all on for four hours a day, almost every day. All the make-up people and production assistants are very encouraging, almost like amusement park attendants.
Heading up the stairs to the make-up room, I walked through a door and literally ran into Matt Lauer. “Hi guys!” he said. “Do I really need make-up?” I asked and the make-up people nodded with religious conviction. I asked them about their favorite stars to work on and they told me “the stars bring their own make-up people.”
The producer called to say I would do great. I think I sounded nervous, which made him sound very nervous. We ended up reassuring one another. I wanted to ask if I could use the word “kick-ass” on the air, for reasons I can no longer remember, but then told him “forget it,” and he said “what?” and I said, “no, forget it,” and then he said “Just don’t get nervous.”
At that very moment I was thinking of a Post headline I saw on my last visit here, when the Mets choked in a pennant-race (”PAGING DR. HEIMLICH”), and the one from the day before, when Mike Huckabee had to apologize to Mitt Romney (”I HUCKED UP.”) A PA escorted me onto the set five minutes before the segment started. I shook hands briefly with Meredith Viera, and with 90 seconds to go, I was wired for sound.
While I sat in the bar-stool, Meredith Vieira’s executive producer kept making jokes in her earpiece that caused her to say “You’re terrible.” And “stop.” She turned to me and said “He’s just being mean,” though of course I had no idea what the executive producer was saying. She sized me up and then said, “Can I preview the out?”– the segue to the next segment which the anchors memorize in case at any moment they have to end the current segment.
I tried to remember the advice I got the day before from a friend of a friend, waiting on the outdoor platform for a train in an ice-storm, clutching a cell phone with a frozen, agonized claw (”How much time do you have?” he asked. “12 hours.” “Oh my God. And what’s all that noise in the background?” “It’s me, freezing to death.” “Ok, the first thing to remember is to sound happy — you don’t sound too happy right now, ha ha!”). Here was the advice we got from him, and an Omaha pediatrician with TV experience, both of whom were enormously helpful:
- Enthusiasm, passion, conviction: The most important qualities
- Always answer three questions: So what? Who cares? What’s in it for me (that is, the viewer)?
- Assume the viewer is channel surfing and didn’t hear the question.
- Look at the interviewer; let the camera-people worry about the angle in which to shoot your face.
- It isn’t uncommon for the questions to change the night before the show.
- Don’t lean back in the chair; scoot forward, as this naturally tends to improve your posture.
- Tuck arms close to sides, as this also tends to improve posture, but don’t have your arms too close to your sides.
- Talk with your hands if that’s how you’re comfortable.
- Avoid correcting the anchor; validate the questions.
- If you want to circle back to an answer, you can say, “Like we were talking about earlier…”
- The interviewer usually chooses you because he or she is most interested in your area; assume she is interested in what you have to say.
- It’s probably best to avoid wearing white or patterns of a finer weave than a centimeter. Wearing a blazer gives depth (”I left my blazer at home.” “OK then, wearing a blazer makes you look stuck up. Ha ha!”)
On the set, Vieira was very relaxed and amazingly good at scrolling ahead through the teleprompter script just before the segment started and then never really looking at it again. She was also friendly, which calmed me down. Then she kicked off the segment by saying that I was here to explain how everything a Realtor tells you may be wrong. I knew that somewhere at that very moment, a blood-thirsty mob of real estate agents was forming.
The rest of the interview, I was w
orried about what they would think. But then before I knew it we were done. The producer showed up and said we did great, not entirely convincingly. Swinging by the control room — eerily dark but for the light of forty television monitors — I saw on one monitor that Vieira was already doing aerobics with her next guest.
I met a children’s book author from Palm Beach when I went to pick up my laptop from the green room, and someone in the crowd outside cheered when I came outside. I checked my phone and saw nine text messages from Redfin’s well-wishers. And I felt very grateful to Today’s producers, and lucky to have such a wonderful team, and to work at such a great company.
My mom called to say I was “very informative. But why can’t you sit up straight?”
December 13, 2007
Redfin is launching tonight The Real Estate Scientist, an initiative to use empirical techniques to improve the way our agents and clients buy and sell homes. We’re releasing our first report, which provides seven recommendations for home-sellers, and training our agents on the findings, which should allow us to have more informed conversations with our clients.
We developed this research because the housing downturn has made it harder to sell our clients’ homes. This in turn has made us more introspective about how we can use our special powers – our computer science background and our consumer commitment – to be the best brokerage, not just the best real estate website.
This has been a contentious process. At lunch we argue over the practical questions we have to address for our clients, like the best day to debut a listing or whether it’s really worthwhile to post an MLS property on craigslist. But why argue when you can experiment?
There are plenty of excellent academic studies of local real estate markets. And Redfin has data that most academics don’t: access to 17 MLSs with more than 250,000 listings, and a website used by hundreds of thousands of buyers every month.
We’ve tried to put this information to good use. We know that listings that debuted on Friday rather than Thursday drew 7.7% more visitors; that a vacant home increased the odds of a price reduction by 9.5%; that, because of how real estate websites filter on price, a listing priced at $351,001 got as much as 7.1% less traffic than one priced a dollar lower. A team of agents, engineers, statisticians and writers worked together to produce the report. Some of their findings are surprising, while others confirm conventional wisdom, which has value too.
We only worry that the name we’ve given this initiative, “The Real Estate Scientist,” will open us to being mocked. And too, we hesitated to give consumers simple answers due to the complexity of the underlying data. But in the end we chose the name because it was the one we had used all along, it was fun, and it was the simplest way to explain how our approach was different. We strove for conclusive answers because we have houses to sell every week, and customers who need straightforward guidance.
Consumers who have read early drafts of the report overwhelmingly found our recommendations useful and effective. The industry reaction will likely be different. Some will argue that the report substantiates already well-understood tactics, while others will take the exact opposite position, refuting our points one by one.
But the truth is that a discussion of how real estate brokerages can deliver better results, based on data rather than just opinion, is in everyone’s best interests. And the findings aren’t simply a prescription for how we’ll serve our customers, but the starting point for an informed conversation about pricing and marketing our listings. Hopefully you can contribute to this conversation too, suggesting future avenues for research.
And now we are going to be talking about the findings on “Today,” probably around 7:40 Friday morning. What fun! To get ready for the interview I got my first $50-haircut, by a young Albanian in midtown Manhattan who compared my current style to 1989 Depeche Mode, and suggested I try a different color. “Like blonde?” I said, intrigued. “Just not so gray,” she mumbled. Because I had 30 minutes before running for a train, she cut quickly, putting off a very stylish socialite who was demanding that her hair be wrapped for the ice storm.
And then it was exhilarating to run – really run – through the streets as the year’s first flakes fell and pedestrians looked up gratefully into the sky. On the sidewalks at nearly every corner, there was one guy pushing a salt spreader and, this being New York, another to stand there and tell him what to do.
I had a meeting in the coffee shop of a remote, pretty Connecticut town, covered in silence and snow. Now on the train back, a teenager next to me is reading an article entitled “Sex Snafus That Can Send You to the ER”; a culinary school student who cried after being short on the fare has asked if we could stay together through the connection; and a bald salesman has been eavesdropping on my cell phone conversations.
“You can’t live in fear,” he says, repeating what I just said when I hung up on my last call. Then he adds: “Guys like us, we’re not afraid.” I nod, thinking about the next day’s show. If only that were true!
December 13, 2007
We’re going to be on the Today Show Friday morning!
Are we joining Al Roker for the weather (and housing) forecast? We’ve been sworn to secrecy, but tune in Friday morning around 7:40 a.m. (same time in each time zone) to find out.
And it’s LIVE, so you know what that means … anything can happen. Unless, of course, they have a tape delay for those Janet Jackson moments.
Check back tomorrow morning to get the scoop and maybe even a first-hand recount of what goes on behind the scenes.
In case you don’t know where to watch the Today show in your city, find out here.
December 2, 2007
Everyone has been forwarding around Union Square Ventures partner Fred Wilson’s posts about how often and why his investments have failed. They are remarkable for their candor, for their argument that success depends on being able to change course quickly, and for Fred’s low failure rate (20%).
It made me wonder if the characteristics that make Fred such a compelling blogger — his willingness to think out loud, his openness to the possibility of failure, his simple enthusiasm for a dialog about ideas — also account for his success as a venture capitalist?
Maybe the essential quality of an entrepreneur or venture investor is what John Keats once called “Negative Capability,” the capacity to be “in uncertainties, Mysteries, doubts,” rather than prematurely forcing a solution to a problem. In any event, what I really like about Fred’s blog — the first I ever subscribed to — is something like his Negative Capability.
It’s very easy to trace his thinking through problems, and he’s always thinking about important problems.
