A few comments about Dave McClure’s Sunday post encouraging entrepreneurs under 30 to sell at the earliest opportunity, from someone who was a founder under 30. I won’t go into the full rant, since I already wrote that last year, but can’t help but comment on a few of Dave’s claims. (Dave already knows I adore his writing style — Dave, I was just telling my twin brother this morning that I wished I had your voice — even if we disagree here.)
1. “Once you have a deal under your belt — whether it’s a $3M deal, a $30M deal, or a $300M deal, you are bankable. People will bet on you again.” Ideas, not capital, are scarce. Selling a good company so that one you haven’t even thought of yet will be bankable — that is madness. Aaron Patzer — and anyone else in his position — was bankable well before he sold his company.
2. “And for the young entrepreneur — particularly those under 30 who’ve never done it before — the single best thing you can do to ensure your future success is TO GET A DEAL DONE.” Saying it is especially good for young entrepreneurs to sell their company is especially wrong. Entrepreneurs “who’ve never done it before” don’t need a farm system, or training wheels, or a practice run. Almost every great company (Amazon, Apple, Dell, Ebay, Google, Microsoft, Oracle, Yahoo!, PayPal, Facebook) was started by someone 30 or under. Your best idea usually comes before you’re 30. Your ability to take risks is highest before you’re 30. In my experience, second-timers have a higher success rate because they are pragmatic and savvy about building a company for an exit, but the magnitude of success is highest among first-timers. If first-timers don’t create public companies, nobody will.
3. “Playing well sometimes means you take a single or a double instead of getting thrown out trying to steal home.” This talk of “swinging for the fences” and “striking out” or “getting thrown out at home” seems like a scare tactic. The difference between software and baseball is that you can swing for the fences and miss, and then just go back to second base. With the exception of Pointcast in 1997, which startup has gotten to the point where a lucrative acquisition is possible, decided to try building the business further, only to discover that there is no longer an exit at all? The company I co-founded, Plumtree Software, turned down seven acquisition offers before going public and accepting our eighth offer. What once made it hard for young people to hold out was their need for cash, but now most successful companies give the founders an opportunity to sell part of their stake early.
4. “Why is it that no one seems to think switching jobs every 3-5 years is a bad thing, but somehow think that selling your business to someone who really wants it and will grow it isn’t terrific?” Selling your business and switching jobs are totally different; anyone who has started a company knows that; you know that. The idea that every entrepreneur is a serial entrepreneur, who can think of a new startup as easily as getting a gallon of milk from the store or finding a job at Kinkos, is a fiction we use to persuade ourselves that we’ll easily get another shot at greatness. It isn’t that simple. Ask Max Levchin, who seems to have gone through a Great Night of the Soul before founding a maker of Facebook applications, Slide. Just ask Aaron Patzer in five years. I don’t know Aaron and certainly wouldn’t want to bet against him, but if he makes as much money or has as much fun building his next startup as he did this one, he will have beaten some major odds. If I had been his adviser, I’d have helped him do whatever he wants — just as you did — but I also would have told him to keep having fun if he still believed in Mint. I think entrepreneurs need to hear that, too (for the record, I love Redfin as much as Plumtree, and Redfin may get bigger than Plumtree too, but this was a lucky break).
5. “More transactions of any kind or size help improve overall startup ecosystem health.” It is an interesting argument that small-scale transactions create liquidity and transparency, but surely public companies do that best. More to the point, Google, Microsoft and Amazon can’t buy every startup, particularly since many of their recent acquisitions haven’t been accretive. Without new venture-backed companies maturing into public companies, the total amount of capital available to fund innovation will decrease.
And the rest I agree with. It is outrageous baloney that anyone pressured Aaron Patzer to sell Mint. And there are plenty of startups that should sell when they can, for reasons both rational and admirable. But telling young entrepreneurs that they’re not ready to be a Jedi yet, just because they’re young — that just isn’t the Dave I know and love…
Update: a comment notes that the original Jason Fried essay never said that Aaron Patzer was pressured or forced into selling Mint. Jason just said that there’s an environment that made it easier for Aaron Patzer to sell, a point to which I am at least sympathetic. Jason, I just read your essay more carefully, and see that this comment is correct. If you read what we’ve written earlier on the topic, you’ll see that we agree even more than I had originally realized.
Fred Wilson yesterday wrote about the analogies between startups and cards or sports, and decided he especially liked poker analogies. He watched his son try to decide whether to fold a bad poker hand, and said that venture investing often involves the same thought process.
We’ll I’ve been in that situation too, except I wasn’t the guy holding the cards, I was the cards themselves, desperately hoping not to get mucked away.
As I explained in a comment on Fred’s post, my problem with thinking of business as a card game is that, at least ideally, a game of cards is all calculation and no heart. Not so in sports. When you’re running a marathon or riding in a bicycle race, you feel despair and elation, you love the effort and you hate it, you pour your guts out and then later wonder if you really had anything more to give and it goes on and on and on and then when it finally ends you only want to be in that place again. This is how I feel about startups, too.
Which is different than how I feel about cards. The difference between sports and cards is that in cards a jack is always a jack, and an ace is always an ace. But sometimes in sports — in life –the jack digs deeper and beats the ace. If you’re the jack, you have to believe that can happen or you’ll spend your whole life in the muck pile.
Now a venture investor can’t afford to think like that. He want to detach his heart from his brain, ignore sunk costs, and bet on the aces all the time. For the VC, it’s all about picking the right team before the game even starts, and for the entrepreneur it’s all about playing to the best of your ability and then some.
So I guess what I’m saying is entrepreneurs are more like athletes — this is our weakness, that we too often play with insufficient calculation — and venture capitalists are more like poker players. It’s a good balance.
And it’s not that either one of us is purely one way or the other. For example, at our annual company meeting yesterday, Madrona’s Paul Goodrich gave an unexpectedly emotional account of how, from our earliest days, he came to believe in Redfin and what he had done to help us succeed. And for my part, Fred Wilson has helped me think more along the lines of the wonkish Peter Drucker, who once asked the brawling hockey player Jack Welch a question that Welch said changed his life: “If you weren’t already in this business, would you get into this business today?”
I ask myself that about Redfin all the time, but am never sure my answer to the question — “YES!!!!” — is emotional or rational.
The best entrepreneurs can be both ways — the cards and the card shark — calculating the odds dispassionately and then diving into the action with gusto. Did you see Malcolm Gladwell’s essay last week on the CEO of Bear Stearns, Jimmy Cayne? Cayne was a great bridge player who got his job at Bear Stearns by interviewing with a bridge aficionado, Ace Greenberg (great name). Here is Cayne’s account of that interview when the subject turned to bridge:
Greenberg says, “How well do you play?” I said, “I play well.” He said, “Like how well?” I said, “I play quite well.” He says, “You don’t understand.” I said, “Yeah, I do. I understand. Mr. Greenberg, if you study bridge the rest of your life, if you play with the best partners and you achieve your potential, you will never play bridge like I play bridge.”
But by the end of his career, Cayne had lost count of trump. He believed so blindly in Bear and his ability to run it that he couldn’t see the risks he was taking. He got a standing ovation from the folks he worked with even as investors ran for the exits. That’s not the way to go either.
Over the past few months, Twitterers and TechFlash readers have invented a war between big and small startups, and somehow Redfin has landed on the wrong side of it. I only noticed it last night. The great Josh Petersen of 43 Things compared Adam Doppelt’s fantastic essay on boot-strapping Urbanspoon to a talk Marcelo Calbucci had asked me to give at the Seattle 2.0 awards:
For any aspiring entrepreneur, Urban Spoon’s advice is a lot more actionable and realistic than the recently celebrated keynote at the Seattle 2.0 awards. Glen Kelman’s talk should come with a warning label: if you are listening to an entrepreneur give advice for 20 minutes and he’s talked about raising money and valuations but never mentioned making a profit, look out! In his talk, Glen assumes “sooner or later you are going to have to raise money” because, unlike Urban Spoon, he’s not thinking about living off the money his product makes or holding his spending as low as it can go the way Urban Spoon did.
I agree that Urbanspoon’s advice is more actionable and realistic; I wasn’t trying in the keynote to tell people what to do so much as express how we’ve all felt from time to time. Folks in the audience like Jonathan Sposato and Kelly Smith don’t want to hear from me how to run their businesses, especially not at an awards dinner.
The truth is that neither Adam nor I wrote or spoke much explicitly about how to turn a profit. But I did try to talk about profits from the start, saying that all our anxieties as entrepreneurs turn on whether we can make money. Later, I encouraged entrepreneurs to build a product good enough that customers would pay for it and to focus on a meaningful problem as a means to profits rather than the other way around. Both Adam and I described working 18 hours a day in a crumby office for no or low pay as being the essential characteristic of life at a startup.
Adding on to Josh’s critique, Brad Hefta-Gaub wrote that he agreed with Josh that too much attention has been paid to my (see comment from Brad) a “go big or go home” approach.
Here’s where I want to set the record straight. I have nothing but the highest respect for boot-strapped startups. They’ve done what Redfin tried but failed to do, which is get to profits without spending other people’s money.
So why do folks think I feel otherwise? I can only assume that this beef began with a blog post I wrote last September, called Honey, I Shrunk the Startups. That essay took issue with two venture capitalists, Fred Wilson and Rob Monster, for arguing that the same big ideas we funded ten years ago for millions could now be launched for $100,000 or even $25,000, because of lower hardware costs and reusable software components.
I just didn’t see how $500-million venture funds can generate meaningful returns from 30 or 40 companies with $5 million exits, a problem which Fred himself has recently written extensively about. And I still worry that some big ideas — which will always take talent and time — have been cut down to size for lack of funds.
But the venture capital industry’s problems aren’t Urbanspoon’s problems. What I said about VCs’ need to get a big return on a few of their deals doesn’t apply to Urbanspoon.
And my preference for big ideas isn’t the same as a preference for big companies. Picnik, in my view is a big idea; can you imagine how hard it is to build Photoshop on the Web? Urbanspoon is a big idea, competing against entrenched competitors like Yelp and CitySearch. Both companies are small.
Given a choice, we would all prefer a startup with a big idea rather than a small idea. We would also all prefer one that spends less rather than more money to develop that idea. But a big idea that can be built for very little money isn’t always easy to come by.
So some of us pick narrowly focused startups we can build on a dime, while others focus on big ideas that also take a lot of money. My argument has always been that there should be room for both, not just the small idea. As I said in the original post:
Of course, some businesses don’t need a lot of money to get big. Others are happy to remain small. But there are big ideas that take time and money…
And a third time at the end:
The (TechCrunch50) judges may argue over which contestant is the most clever or polished, but for those of you scoring at home, there’s room on the card for another column. Which startup is most likely to f*** with the order of things? We need a few of those too.
So I am not arguing that all startups should be big, or that big startups are better, only that we need startups with ideas large and small. The same Procrustean bed that stretched every startup in the ’90’s to be bigger is now scrunching some ambitious startups down. Big isn’t always better. But smaller isn’t always better either. VC-backed deals are best for some companies; boot-strapped companies are best for others. Arguing for one or the other is just silly.
The only startup I am arguing against is the venture-funded company built to self-destruct in 18 months, which never seeks to generate a profit because its only hope is to get bought before it has to. As I said in the original essay, these days, “most entrepreneurs don’t even aspire to build a self-sustaining business.” Given this emphasis, I’m not sure why Josh says I’m “not thinking about living off the money [my] product makes or holding [my] spending as low as it can go.”
Redfin is not a venture-bloated bully looking down its nose at other little startups. We aren’t looking down our nose at anybody. We’re fighting to get profitable and serve our customers well. We look at all the great startups in Seattle and we try to learn from everyone. Already this morning here at Redfin, we were all abuzz about what we could learn from Adam’s essay.
Of all the venture-funded companies to characterize as a goliath, Redfin must be the last choice. We started as a bootstrapped company with the first map-based real estate search and no money when we suddenly found ourselves staring down the barrel of two new map-based search companies run by terrifyingly brilliant people that would ultimately raise $120 million from Accel, Benchmark, Sequoia and a handful of hedge funds.
We’ve raised a sixth of that, even though our model is less capital-efficient: only Redfin has to hire actual customer service personnel in every city we serve. Maybe others think it was dumb for us to have chosen this, or just plain too expensive, but it was the only way we thought we could really change the game.
Who knows whether Redfin will succeed. I think everyone would agree though that there’s a need to make big bets and small bets, and that Seattle will be better off when a decade from now one of today’s startups becomes a company like Microsoft, Real or Amazon, one that can buy other startup companies too. That’s still worth shooting for.
Every Monday, Wednesday and Friday at 11:30 a.m., some of Redfin’s finest physical specimens have been stripping down to our under-shirts to compete in the 100-pushup challenge. We’ve been faithfully working through the 6-week program, which promises to build anyone into a mini-Schwarzenegger, for 14 weeks.
We embraced the macho rhetoric of the 100-pushups website (”let’s face it… most of you reading this won’t even be able to manage 20 pushups. Actually, I’m sure many of you can’t even do 10″). We measured our intervals with the iPhone’s stopwatch. We webcast our efforts so we could improve our form. There was talk at one heady moment of a Redfin calendar.
Weeks of pain ensued.
When Rob McGarty first cooked up the challenge, I somehow fancied myself a hulked-up leader presiding over a scrawny pack of over-awed colleagues. Reality was instead populated by the strapping Adam Wiener, Jamie DeMichele, Chris Glew, Dave Billings and Jason Brackins, all of whom are possessed of orangutang strength.
Today, the greatest of them all, Jamie DeMichele — senior Redfin data engineer, derisive pec-squeezer — ripped off 100 with hardly any sign of strain:
We’re still awaiting results from the drug-testing labs, but it seems certain we have a winner! Way to go Jamie!
As we plunge further into the Great Recession, it’s natural to wonder, like Alice falling down the rabbit hole, what the world will look like when we land.
Other bubbles have left behind an excess of infrastructure that would later come in handy: railroad tracks, telegraph lines, Internet fiber. What will we have to show for this one? Some have suggested little more than a string of weedy Gulf-Coast ghost towns.
It’s hard to accept that that’s it. For all that we’re going through, we have to believe that we’ll come out changed in some important way, hopefully for the better.
So here on the Redfin blog, we’re publishing a series of posts on how different parts of the world we see flying by are different than the ones we had before: the Internet, the startup economy, the media and the real estate industry. Today we start with the changes that we have already begun to see on the Internet.
The Return of Software It will come as no surprise that we are glad to see startups consider business models beyond free ad-supported sites. In July last year, we had complained that free software had become “Silicon Valley’s new religion,” an “adolescent anarchism” codified into a broad ideology that couldn’t apply to every sort of online business, particularly those that don’t reach a huge audience. Now 37Signals has joined the charge.
The reason for this is the pressure on startups to generate meaningful revenues now, even at a modest scale. It was easy once to raise money on the idea that your business would work at Yahoo’s scale, particularly if your goal was to get bought by Yahoo.
Google encouraged this behavior, by rewarding sites with more traffic that presented information in a generic way its indexing robots could understand, free of charge, rather than in the context of an application or for a fee. But now that fewer companies are buying and venture capitalists are wary of footing the bill, startups have turned to the most direct way to get money: from their users.
Commerce is How Software Makes Things Better
This is good news for the economy. Direct commerce is the simplest way for the web to do what technology is supposed to do: make something cheaper and better, usually by cutting out a middle man, not by creating a new one. Even though transactional businesses scale more slowly than media sites, they generate more revenue per website visitor — based on our experience in online real estate, by a factor of at least three to one.
Media Sites Become Web Applications
And it’s good news for software too. There’s a reason it’s hard to build great ad-supported software. For most ad-driven websites, the goal isn’t necessarily to engage an audience in the completion of any particular task so much as to redirect it toward a purchase on an advertiser’s site.
This is why, to take just one example from our world of online real estate, many ad-driven sites only show one photo of a home for sale, where we show 15. We want you to stay on Redfin until you buy the home. The media sites have to let you visit their advertiser’s site for more info.
MySpace and Facebook: Media Site vs. Web Application
This difference in approach is why MySpace can be a bit of a disaster zone for users but makes plenty of ad money, whereas Facebook is a powerful “social utility” that can’t get top-dollar for its ads. MySpace as a media site is just one page after another, like the New York Times as written by your teenager, on drugs. In Facebook, the pages are components of an application, working together so well that you never want to leave, even if it’s to visit an advertiser’s site . It’s no accident that MySpace is based in the media capital of the world, Hollywood, while Facebook is in the software capital of the world, Silicon Valley.
I’ve often wondered why Facebook doesn’t just charge people to stay on its site, since that’s clearly the intent of their web development, and it’s clearly what their users want to do too. A Flickr-style fee for storing additional photos or messages could perhaps generate more than $1 billion in revenue, in a way far less intrusive to its users than Facebook’s past ad-related blunders. Maybe that will happen soon, too.
This is not to say that you can’t build beautiful ad-driven sites, or that you can’t make money from those sites. The web is by far the world’s most powerful advertising medium. But it’s much more than that, too.
But what do you think? When this Great Recession has done its worst, what will the Internet will look like? Will the revenue pressure on web startups make it more mercenary, and less fun? Or will it just make it better? It’s hard not to believe that a little less media and a few more web applications will make the Internet richer, and better.
Redfin published a guest post on TechFlash this morning about how the balance of power has shifted between the idealists in business who advance a company’s sense of mission and the mercenaries who insist on being 100% focused on profits. In many ways it picks up where an old Redfin essay about get-rich-quick-schemes left off.
Redfin stats expert Mose “The Underground Man” Andre will be pleased to see another Segway reference, reinforcing his comparisons between me and the Segway-riding illusionist on Arrested Development. Thanks to John Cook and Todd Bishop for agreeing to publish the essay.
Any guesses on where the title of this post came from?
After Redfin’s layoff last week, the CEO of a startup down the street emailed to say “at least we’re not public!”
Which made me wonder how private we really are. You can hide from the Wall Street Journal but not from the hundreds of tech and real estate blogs that covered Redfin last week. One big difference between Web 1.0 and Web 2.0 is that this time, the meltdown will be blogged.
That kind of attention can lead startups to dither like publicly traded companies before making hard decisions. And it has prompted some startups to turn against blogs just for covering the news.
Connections with Other Little Companies, Everywhere But Redfin has no complaints. Blogs brought us our first customers and our best ideas. Most important for the lonely types who tend to go off on their own to make software, blogs connected us to other little companies everywhere.
Sure, eWeek or CNET covered startups before, but it was blogs like TechCrunch and GigaOM – with their fits of idealism and jadedness, of accessibility and remoteness, of cleverness and heart, their sense of “we” and “they” — that first made us feel cool.
When Redfin announced our layoffs, we expected all that to turn against us. But there was only empathy for the company and, most important, for the people who had to leave the company.
To all the folks who blogged or commented on our setback, thanks for your even-handedness. Redfinners past and present have never needed your support more, or expected it less.
The End of Cool The only thing that we lost in having blogs write about our troubles is our cool: the cool of startups that never struggle, that show up on all the “hot” lists, that always seem to be having a ball, that don’t have a care in the world.
That’s ok. Startups haven’t always tried to be cool. Today, the blogosphere has created its own celebrities, mixing Michael Arrington with Ashton Kutcher, MySpace with Paris Hilton.
But my first startup job was about as far from cool as you could get, a reunion of all the people at the desolate end of the high-school cafeteria. We rented U-Hauls to drive our own pop-up booth to a trade-show. At big client meetings, we wore debate-tournament-era suits.
Even starting a company that went public was never really cool in the way it’s usually portrayed: it meant walking through rivers of my friends’ blood, and working on silly little things all night, and caring too much, and becoming a jerk and becoming humble again, and it meant joy that arrives without your noticing it, and love and above all things — not a flash of brilliance or a dramatic strategic decision — endurance.
And that is the one trait that characterizes Redfin, endurance. This was a business run out of an apartment, by people working for free. We created a real service when it was fashionable to be all virtual. We have changed the game rather than play the game. And now we offer a service so valuable to so many people – and so much better than what they have come to expect — that I believe we will always endure.
The Only True Currency It seems like the blogs — which are typically written by compulsive people late at night in their bedrooms, for reasons they can barely explain — are best equipped to understand what we are going through: setbacks and endurance, passion and hardship, being cool and not being cool, working for love and scrapping for money.
As Lester Bangs explains in “Almost Famous,” the “only true currency in this bankrupt world is what you share with someone else when you’re uncool.” This impulse is what drives blogs and startups alike. That bloggers have reached out to us now, when we have never felt less cool, is the truest currency there could be between us.
Today Redfin laid off roughly 20% of our employees.
Unlike other startups, our industry’s recession started a year ago, when home prices first plunged.
Since then, we’ve fought like starving animals, and with some success: while industry-wide transaction volumes dropped 33%, we grew revenues by nearly 50%. Traffic grew more than 300%.
Even a month ago, we were raising 2009 revenue projections. All our markets, now including Chicago, contributed profits.
But the past few weeks have seen a major reversal. As the stock market wiped out prospective down-payments, tours and offers dropped 30%. Transactions that were done came undone. October will still be pretty good, then we’re headed for a big dip.
Hence the layoff. Layoffs are painful for any company, but especially for a startup and especially, I think, for Redfin.
The Layoff & Redfin’s Values That’s because Redfin folks have always been believers. We earn our salaries from 9 to 5 but everyone leaving today gave a lot more than that.
The company has always had a sense of mission – to change the real estate game in consumers favor, yes, but also to be an open, humane place to work. It may seem now like we are a business that cares only about profits.
We aren’t. The whole company has been dedicated to the idea that money is how businesses work, but not why.
We want to make money, yes — and not just a little — and we absolutely have to avoid running out of it, but we haven’t given up on our larger ambitions: to build a new kind of company for employees and consumers alike.
To Those Leaving
Even under great financial pressure, we have treated departing colleagues as generously as we could: less than we would have liked, but as much as we could possibly afford.
To those who left, I can only say thank you for all that you’ve done for Redfin, and I’m sorry. It wasn’t your fault that you had to leave, and we will do what we can to help you take your next step. We’ll miss you, and we wish you the best of luck.
What Next for Redfin? And now, we have to answer the question the rest of Redfin is asking: is this the beginning of the end? No, I don’t think so.
The Best Website The sky may be falling in financial markets but our competitive dynamics haven’t changed. We can become the #1 real estate search site because our data is better than the media sites’ and we think our engineers are better than other brokers’. We’re willing to share more data with the consumer than either one of them.
An Essential Service Our value proposition isn’t entertainment; it’s to make a fundamental service better and cheaper. We offer an alternative to traditional brokers that customers want, and not in some namby-pamby nice-to-have way. Our market, even if it shrinks to half its recent size, would be $30 billion per year.
A Large Market…
That means we have plenty of room to grow. But we won’t grow without taking big chunks of market-share, which also means we’ll have to keep tinkering with our offering so it appeals to the mass market. We’ve been planning a change to our service for months, which we’ll launch in November.
But We Have to Change Change is painful, but necessary. Late in Charles Darwin’s life, when he was busy rejecting the application of his principles to social policy, he explained that “it is not the strongest of the species that survives, nor the most intelligent… it is the one that is the most adaptable to change.”
It’s tempting to write Redfin off now precisely because we are adapting to the market. At my last startup, we adapted quickly, laying people off early in the dot-com bust. Many wrote us off. But in 2002 we completed one of only two high-tech public offerings that year.
Redfin’s whole business will struggle and fight and may yet fail. But the only way it is possible for us to succeed – and, even today, I believe we will – is if we adapt.
A job applicant just told me Thursday that “Everybody knows you don’t like Microsoft or Amazon people.” Just last week, a board member heard the same thing.
Which came as news to our chief technology officer, our Seattle-based engineering leaders, three star product managers and our hyper-productive lone marketing director, all of whom worked at Microsoft.
So it’s probably fair to say that no CEO from Silicon Valley has a higher opinion of Microsoft than I do. I learn from Microsoft every day. And I’m intensely grateful that so many Microsoft and Amazon folks have thrown their hat into the Redfin ring.
“This Was Discussed at the Highest Levels Within Microsoft” The trouble started because of one line in a Redfin job description: You don’t need big money to do something big. Don’t apply if you’ve worked too long at Microsoft, Amazon or an agency.
“This was discussed,” one applicant explained over a slice of pizza at a mall food court, “at the highest levels within Microsoft.”
What kind of “pompous ass,” one angry Microsoft veteran asked us, would write this job description? The people at Microsoft and Amazon, he continued, “know exactly what it takes to run in a start up environment, we were doing it when whoever wrote this ridiculous JD [job description] was probably in diapers.”
Of course, I’m the pompous ass. We agree that 30 years ago, Microsoft could still fairly be called a startup, though by that time I had graduated to underwear.
We probably disagree over whether someone who has not worked in a startup for 30 years is still a startup-type of person. And we disagree too, over whether any disrespect was intended to Microsoft, a company more successful than we’ll likely ever be.
Different Horses for Different Courses My point wasn’t that any 15-year veteran at Microsoft has less talent or skill than the driven maniacs who tend to thrive at Redfin. Microsoft is a gladiator academy for brainiacs. But no one can honestly tell me that marketing Windows is remotely similar to persuading someone to ditch her Realtor-friend and buy a house through a website. We have no no budget, no agencies, three people.
We have to win by delighting consumers, juicing the Google index, having Octopus sex with the blogosphere, fighting like a trapped squirrel, moving super-fast. There’s just no way a company the size of Microsoft or Amazon — or Google (after complaining that we never saw Google candidates, we have seen a few) or Apple — could remain as desperate and impatient and unrealistic as we are.
“How Long is Too Long?”
Our best employees left Microsoft because they were squirrels and octopuses, juicers and speed-freaks. Some had been there two years. Some five. Some longer. But none had been there “too long” which was supposed to mean past the point of being passionate about what they do.
When we wrote this job description, we’d interviewed plenty of Microsofties who talk about staying “too long.” They’d say Redfin is a way to rekindle their passion for software or business. It makes us feel like a red sports car, or an extramarital affair.
Of Microsoft, But Unlike Microsoft
The truth is that many of the people at Redfin are of Microsoft, but they all say Redfin’s not like Microsoft. Marcelo Calbucci explained the difference.
The way I think about it is that our left brain (analysis, discipline, brilliance) comes from Microsoft, and our right brain (speed-lust, techno-promiscuity, the Internet’s goofiness and freedom as a cult) comes from Silicon Valley; nearly half of Redfin engineering is based in San Francisco.
It’s a good balance. What we’ve learned from Microsoft employees has made us better in engineering, product management & HR, where Microsoft folks excel. In marketing, Microsoft has taught us how to think in different dimensions than just public relations, social networks or search engine optimization.
What Do You Think?
We thought we’d ask other startups what your experience has been hiring from Microsoft and Amazon? And we’d like to know what to do about the job description. If it has offended others, we’ll change it. If there are any folks from Microsoft or Amazon reading this blog, please, tell us what you think (and if you haven’t worked there “too long,” apply for a job!)
One small good thing about Wall Street’s terrifying meltdown: this year’s graduating class will send fewer of its best people into investment banking and more into fields where they’ll actually make something new and good.
I remember walking around Pioneer Square last year with one of my favorite Redfin engineers, who was mulling career options and thinking about his friends in dermatology and hedge funds.
He’d mentioned the “boatload of money” he could make in hedge funds, so I couldn’t help but ask just what he meant by that. He told me. It was a number so large that it would more than compensate for the weekly fruit basket we offer at Redfin headquarters, and that one time we took some employees water-skiing.
The engineer stayed, and ever since I’ve checked in on him with the fear and gratitude of someone waiting to be dumped. But look who has the upper hand now? Har! har! har!
(We’re very grateful for all the folks who work at Redfin, who are worth more than we — or — I hope! — anyone else — could ever pay.)
Update: Noam Lovinsky pointed out an interesting conversation about bankers becoming Internet entrepreneurs on Fred Wilson’s blog. The comments are as good as the post.
Redfin's corporate blog is the place to read what Redfin employees have to say about Redfin, the real estate industry and other topics such as life at a startup or usability and web design.
