Almost every event at Redfin can be divided into two categories: success-disasters and disaster-disasters.
In a success-disaster, the best-case scenario is so unexpected that it results in a fiasco. The web servers crash under the load. The dog catches the car. The Democrats win Congress. You wear the same outfit Sunday morning as on Saturday night.
Twitter is a good example of a success-disaster. Having a child is another one. You spend all your energy iterating, not planning. Why think when you can experiment? Why plan when it’s faster to fail? As my old partner, the great Joe McVeigh, liked to say at almost any given moment, “MOVE! MOVE! MOVE!”
At Redfin, we have certainly moved, lurching from one success-disaster to another, rarely investing much money in a project until it made money. This is the kind of discipline you embrace after a layoff, which happened two years ago but which we still remember today.
Yet sooner or later you have to hire recruiters, managers, support staff, on the assumption that you’ll continue to grow. Our 2010 plan calls for all sorts of hiring, more actually than we’ve been able to manage. This is a success-success, where you succeed because you assumed you would succeed, not in spite of yourself.
The most dangerous thing a startup can do is assume success: costs get ahead of revenues, growth can become an end in itself, headcount can become the solution to every problem. Your whole business becomes like a truck driving down a gravel road with the windows down; the wind smells sweet until you hit the brakes and the cab fills with everything trailing behind you for the last 20 miles.
But even though real estate has more than its share of ups and downs, we have reached the point where we have to hit the gas. If you plan for success and then succeed, you keep on succeeding, rather than spending the next three months trying to catch up. Like someone running alongside the truck, we’ve spent too much time trying to catch up to our own business.
What this means is that we look good on the outside, but we’re scrambling on the inside. Yes, yes, we received all sorts of accolades Monday for the numbers we just talked about on TechCrunch: the company is generating revenue just now at roughly a $30-million run-rate, on track for profits this year.
Folks from other real estate websites asked if the revenues included the half of the commissions we refunded to our customers (no, of course not). We got the usual questions about investing opportunities (thank you, but our existing investors have bought all the equity we want to sell). It felt great.
But the reality isn’t just top-line growth. I got emails about the TechCrunch video while I was on the phone with a customer disappointed his house didn’t sell this month. Agents are rushing to keep up with demand. Support technicians are racing to bring new computers online. Recruiting and retaining the absolute best people is our biggest challenge.
There’s so much to do that I feel a little self-conscious watching myself yuck it up with Michael Arrington, who by the way, is one of the toughest, most probing, aggressive and fun interviewers we’ve ever faced.
So we wanted to give thanks — thank you, thank you, thank you — to all the people who helped Redfin grow this far – past and present employees & partners — and to those grinding away on problems even as you read this. What makes Redfin glamorous isn’t always glamorous. There is still plenty to do. We still don’t know how the story of Redfin will end. But the real story isn’t in the TechCrunch video. It never is, it never could be. It is bigger, more scary, more complicated, more fun than I can ever properly tell, even in the wide open spaces of this blog.