I mean, I’m an amateur when it comes to real estate. I’m like that kid in the back of the classroom who ate paste. And I don’t mean the kid in second grade. I mean the kid in college who sat in the back eating paste.

I’m also, officially, a Redfinnian.

I’m not entirely sure how I got the job as a writer here. I spent the past nine years writing for videogames – none of which were real estate-related, by the way. I’ve been following the market for the past couple of years, but I came to it the same way most people do, I suppose; my wife and I were considering buying a house. We started reading up to educate ourselves. We started checking out Redfin.

Prices started to drop, then plummet, and we decided to wait until the dust settled a bit. But in the meantime, I continued going to the site, checking on my favorites like they were my prized petunias. I kept reading the blogs and the news. I was like some sort of armchair home-buyer. It’s entirely possible that I was a little obsessed with the process.

One day, my wife spotted the job listing on Redfin for a writer. One short whirlwind later, here I am.

Since I got the job, it’s been interesting to read what people say about Redfin, on blogs and discussion boards, or wherever. Because I’ve always loved the site. The data is great. The map is great. I can spend hours just browsing for houses.

But a lot of people love the site. The interesting part is reading the Internet chatter about the people of Redfin. That they’re crazy, or trying to ruin the industry, or that they haven’t thought their business model through, or that they don’t care about their customers. Or that they’re making some Big Mistake that will doom them to failure.

As I was struggling to commit to my blog entry, Glenn Kelman gave me some advice. He told me, above all, to keep it real. So here it is: You’re never going to meet a smarter, more passionate, more customer-focused group of people than you’ll find stepping off our elevator. Believe the hype. This place is the real deal, and it’s intimidating as hell, frankly.

As for the Big Mistake… oftentimes, the chatter was right. The people here have made some Big Mistakes, some of which might really have killed the business. But it’s a funny thing about mistakes – they only kill you when you refuse to acknowledge them. And if there’s one quality the people here seem to hold above all others, it’s this: You admit when you’re wrong, and you learn from it.

So, for what it’s worth, I promise to work my butt off as the new guy here on the site. I promise that I’ll make my mistakes as quickly and entertainingly as possible. And I promise I’ll do my level best to learn from them.

(Photo Credit: b7_banana on Flickr)

The post The New Guy appeared first on Redfin Real Estate Blog.

We couldn’t be happier about the team behind us. Like all the Greylock partners, James has deep operating experience, having run the gamut from founding a tiny Internet company to leading a multi-hundred-million-dollar business. And even though Greylock has every right to a bad-ass swagger, with probably more publicly traded companies under its belt than any other venture investor, the Greylock people you meet are somehow humble and funny and nerdy while still being terrifyingly impressive. Their first diligence request was a spreadsheet of in-depth Settlers of Catan statistics that we’d prepared for Greylock’s newest partner, the great Reid Hoffman.

We’re a good fit in ways beyond our affinity for Settlers. Time and again, Greylock has invested in cult businesses built with little or no marketing spending that have gone on to become household names — Facebook, Pandora, LinkedIn and, my favorite, ZipCar. Like our other investors, Greylock has the confidence to mentor the talented up-and-comers at Redfin into bigshots, to let Redfin grow as big as it can rather than selling at the first opportunity,  to think different and to think big. And it has high expectations, not just that we can continue to be a nice little business, but that we can become a company that doubles and doubles again.

Already, we’ve got plenty of momentum. Here are some of the past year’s highlights that we included in our funding pitch:

Now the challenge is to keep performing, taking on new risks rather than just consolidating existing gains. For a while now, we’ve been too scared to take many risks. We’ve been profitable since June, but didn’t have much money in the bank, and,as we explained this morning to John Cook, couldn’t think far beyond the month right in front us.

We’ll keep running the business out of the cash register — we worked too hard to get to profits to abandon that discipline now — but the new capital gives us a margin for error when making a few big bets: beyond real estate search, we still have to put the whole touring, offer and escrow process online, and we’ve got to build the systems and processes that allow us to deliver the same amazing service to 10,000 or 100,000 customers every month, not just 100 or 1,000.

For now, we just wanted to thank all the folks who helped us put the round together: Paul Goodrich,  Steve Hall, Marc Singer, Emily Melton and Josh Stein on our board, as well as our excellent attorneys at Fenwick & West, Alan Smith and Matthew Forkner, and finally the folks at Redfin who crunched the numbers and made the pitch: Adam Wiener, Chris Roske, Sasha Aickin, Matt Goyer, Scott Nagel, Michael Young, Angela Cough, Bryan Selner and many others. Thanks to everyone for all your help, and to Greylock for leading the round.

We’re honored by your support, and we”ll work hard to make the most of the opportunity.

The post Greylock Leads a $10 Million Investment in Redfin appeared first on Redfin Real Estate Blog.

• Decreased the cost of bringing a new market to profits by 4x.
• Increased transactions 23% when transaction volumes in many markets were down 50%.
• Increased home tours performed 342%, mostly near the end of 2008; our pipeline is strong.
• Increased customer satisfaction 27% (is Redfin the only brokerage that measures Net Promoter Score?)
• Got 12 new 5-star reviews on Yelp, in Seattle, San Francisco and Irvine.
• Published a study showing Redfin buyers negotiate a larger discount off list price, by $3,594.
• Increased revenues 41% when prices declined in major markets by 18%.
• ­Increased total visits 4x.
• Increased the number of visitors from Google 6x.
• Increased inventory 60%:
  • New city: Chicago
  • New sources: for-sale-by-owner and bank-owned listings
  • New types of listings: townhouses, apartment buildings, undeveloped land
• Earnings above plan by 17%
• Shipped 7 major releases, which included the following features:
  • Low-latency MLS import, synchronizing with nearly every MLS every 15 minutes
  • Open-house search
  • Search by neighborhood
  • Neighborhood pages with stats and charts
  • Google StreetView
  • Google Maps
  • Subscribe to listings by RSS
  • Download listing data to Excel
  • Agent profiles, with customer reviews
  • Safari browser support
  • Tour wizard
  • MyActiveListings: monitor traffic to your listing and where it came from
  • In-line registration
  • Similar listings
  • Notes
  • Visual redesign of site
  • Removal of Boston’s registration requirement

Tomorrow, we’ll talk about the challenges Redfin faces in 2009.  We’d love to hear what you’d like to see Redfin achieve this year.

First however, we wanted to thank you for your support. Every day, we get email messages, survey responses, online reviews, forums posts, tweets, comments, blog posts and calls from folks eager to help us. Your ideas, complaints and compliments get forwarded, debated, quoted, repeated and puzzled over. It helps us win arguments, develop new ideas, work harder, think clearly, give more. It has made it much easier to build a consumer-driven company.

2008 was a hard year for startups, harder still for real estate companies. But through it all, Redfin is still becoming the company we have always wanted it to be. We are still having fun. Thanks for helping us get this far. And happy new year!

The post So Long, 2008 appeared first on Redfin Real Estate Blog.

There are unlikely heroes — the man who first recommended Dick Cheney to be secretary of defense or the blogger who called us out for our TechCrunch post on surviving a recession — and one or two villains too.

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?

Update:  AllThingsD re-posted the essay last night.

The post Profits, Be Thou My Good appeared first on Redfin Real Estate Blog.

The premise of the post isn’t that Redfin has found our way out of the woods yet, only that we’ve been in there longer than others; the housing bubble burst a year before the market did. So far, the essay is steadily climbing the del.icio.us charts.

It was originally going to be a top-10 list of tips, but Redfin’s professorial Chris Glew told me that, when interviewing for his first job at Redfin, he had surmised from my blog posts (for DIY PR,  financial modeling and startup hardships) that all of his answers should be in the form of a top-10 list.

So, I made a top-9 list instead.

Thanks to Wes, Sylvia and Marc for giving the post a going-over, and to a loyal blog reader — why can’t I find his comment? — for asking why startups are so conservative, which became the point of departure for this latest effort.

The post Redfin on TechCrunch: The First-Time CEO's Recession-Survival Guide appeared first on Redfin Real Estate Blog.

When we launched the big upgrade to our home-buying service, with unlimited home tours, agent choice and a higher price, we figured offer volumes would initially fall through the floor, only to build back up after people had worked their way through a longer (but better!) process.

What the Data Tells Us
What really happened was much better. The table below compares Redfin’s performance before and after the big upgrade, comparing two 18-day periods that started on a Friday and ended on a Monday.

Each row counts the number of clients who engage only in tours or only in offers, with the second-to-last row tallying up the folks who got a combo (tour and then offer, engage an agent and then request a tour). The bottom line shows that the total number of clients engaged with Redfin increased by 66 or 6.2%. Comparing those same two periods, website visits were up only 2.55%, so the new program definitely converts better.

We were delighted to see that offer volumes hardly dropped at all, particularly since all our agents are saying the launch has significantly increased offer quality (it will take a few weeks to measure how many offers shake out but prior to the big upgrade a lot of people sent us born-to-lose offers, just as a way to be able to talk to someone and see what we were like). We have no idea why tour requests would drop, except perhaps because of the holidays; we still expect the number of clients touring with us to increase significantly.

But the small decreases in tours and offers were more than offset by 122 people using our website to engage a Redfin agent to guide them through the rest of the process. In the past 18 days, another 59 clients engaged us and have also already gone on a tour or made an offer.

What Our Agents Are Saying
Reports from the field have also been good. Marshall Park reported that a couple he met face to face spent “thirty minutes shooting the breeze on offers, the  economy and the northern Virginia market” only to make an offer the next day. Out in LA, Joyti Goundar said pretty much the same thing: “people love the fact that they can send me an email to check status on a property and do some comps so we are prepared before we dive in.”

In Chicago, the ever-thoughtful Mark Reitman reported that “It seems, from the customer perspective, everyone loves the upgrade, without any hesitation about the new pricing structure.”

Of course no one is counting any chickens before they hatch. We can’t judge the upgrade a total success until some folks come out the other end. But we’re tentatively happy at how things have turned out so far.

Any folks who have actually used the new service,  please let us know what you think! And Happy Thanksgiving!

The post Good News for People Who Like Bad News (Redfin Upgrade is Working) appeared first on Redfin Real Estate Blog.

Unlimited Tours, Agent Choice
To hit the mass market, we’re upgrading today our home-buying service to offer free unlimited tours, and a choice of agent, and support from that agent all along the way. We’re changing our home-selling service to offer in-home consultation, open houses, a big marketing blitz and tours for any interested buyers.

50% Commission Refund
And we’re raising prices. Tours are now free — we used to charge $250 per tour –  but we’re changing the commission refund for buyers from 66% to 50% (existing customers relax, you pay the old price).  The average refund should drop from $10,000+ to nearly $8,000. If people use Redfin to sell one house and buy another, the total savings will still in most cases be about $20,000.

These are big changes, which we first tested in April, researched in June, and discussed as recently as September.  You can get all the details from our press release, or check out the new search features.

Having made these changes, we can’t imagine why anyone would choose a traditional agent over Redfin. We now offer just about every personal service offered by a traditional agent with the possible exception that we won’t preview homes on our own.

More Personal Service, More Online Service
But our goal still isn’t to be just like a traditional agent. It’s to be much better. We’re offering more personal service, but we’re also offering more online service too. The whole website changed to let you evaluate an agent, choose an agent, request home tours, ask questions. Hopefully this combines the personal & the online into one seamless offering.

Still Different from Other Brokerages, at a Molecular Level
And hopefully, this means we can change the game not just for a handful of digerati, but for everybody. Because more than ever that’s what we are here to do, to give consumers the information and tools to be a partner in the process, not a sales target.

This change makes us more like a traditional broker in a good way — we’re narrowing a competitive gap — but it doesn’t mean we’re becoming like everybody else. The difference between Redfin and traditional brokers is obvious and simple and huge and it has nothing to do with offering more tours:

• Free the data: we publish data other brokers won’t. This makes our customers smarter and more powerful. Our site traffic has grown more than 300% year-over-year.
• Ditch the sales-force: our customers come to us via the Web. We don’t have a sales-force. This is how we afford a commission refund of 50%.
• Back off: we have always been a customer-service organization — a fanatical customer-service organization — not a sales machine. We pay agents on customer satisfaction, not commissions, so customers won’t feel pressured into a high price range. Our customers get the time & space to make their own decisions, and advice they can trust. Our customer satisfaction rate is 97%; the industry average is 85%.
• Get results not relationships: our agents’ job isn’t to buy you dinner. It’s to get our customers the best deal. We measure our agents’ performance — obsessively — and our agents perform better in negotiations. For two straight years in every market we’ve measured, we’ve negotiated a bigger discount off list price, by about $3,500.

There’s nothing in our DNA about refusing to help people see a home they want to buy, or telling them to hold their questions until they’ve submitted an offer. But even though these limitations are obvious and stupid, we clung to them for a long time.

What Took Us So Long?
I’ve sometimes thought the most conservative organization in the world is a startup, which spends so much energy nurturing its delicate sense of self against naysayers and self-doubt that it can hardly admit mistakes.

We thought that changing a consumer service designed mostly on the back of a napkin in 2006 meant having to admit we were wrong (it does). And I thought for a long time that offering personal service meant we weren’t an online service (it doesn’t).

So in focus group after focus group, customers said they wanted more tours, they wanted to be able to call their agent, that the difference between a 50% or 66% refund didn’t matter much to them. But we continued to make identity-based decisions about what we could and could not do. Many meetings ended by my saying, “that’s not who we are.”

Change is Good
Then, Fred Wilson talked about how startups are a “process of going down lots of dark alleys only to find that they are dead ends… and trying another and another until you find the one paved with gold.”

CEO Tony Hsieh said that Zappos isn’t an e-commerce company or a shoe company but “a customer-service company that happens to sell shoes.”

Redfin Director Marc Singer said that consumer companies have to change constantly, because they’re listening to consumers constantly.

We were never at a dead-end — revenues grew more than 40%, even this year — and we’ve always been customer-service fanatics, but we have resisted thinking these changes through to their logical conclusion.

A Software Company Becomes a Consumer Company
The conclusion I’ve come to is this: that more than just upgrading our service, Redfin grew up today. We’re still using technology to change the game, but technology is just a means to an end, not an end in itself. This means we’re not a technology company, or a real estate company, but a consumer company.

We know this is a good change for our customers. We believe it’s a good change for us too. We’ve got another big change coming in the spring. But for now, let’s see what you think of what we’ve done so far.

Thanks to all our supporters, and all the folks at Redfin past and present who helped to launch the new service.

(And tune in later today for a visual walk-through of all the new website features.)

The post Our Shot at the Mass Market appeared first on Redfin Real Estate Blog.

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.

We are one of the few startups to offer:

1. an essential service
2. directly to paying clients
3. that yields multi-million dollar revenues.

A real business used to be unfashionable, but now it’s indispensable.

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.

The post A Very Tough Day appeared first on Redfin Real Estate Blog.

He’s taking a long-planned one-year sabbatical with his fiancee to travel around the world, and just wrote an eyewitness account of life at Redfin based on his nearly two years here. We rarely realize how the world perceives us so I was very interested to read it, particularly since Shahaf has always been thoughtful, candid and constructive.

Shahaf describes Redfin as a place full of passionate, hard-working people, heralds our customer-focus, complains that our benefits package should include a health club membership, notes that we get into silly arguments with one another, and also wants us to do more long-term planning. He talks about learning more and advancing his career much faster than at a big company, but also says he could work at a big company again. It’s entirely BS-free, and has given me a lot to think about ways we could improve.

In the end, Shahaf acknowledges that there is a “non-zero chance that Redfin won’t be there by the time I return from the trip.” Shahaf refers to this risk as “excitement,” which made me smile. It’s true that our company has to perform to grow into a self-sustaining company,  but that’s a good discipline. Business lately has been good and, as Shahaf notes, we’re operating in a huge market, and our customers love us. In the end, he manages to sound sober and optimistic at the same time, a trick many startup leaders struggle to master.

In a second post, Shahaf talked about what he’ll miss in his year away from Redfin’s culture, praising Dan Fabulich’s “incredibly high signal-to-noise ratio;” Chelsea Mitchell’s exuberant piercing, joyful laugh; Jamie DeMichele’s launch-day lab coats; Kevin Broveleit’s harrowing, heroic (and successful!) efforts to lose 20 pounds in seven days.

A great poet once talked about traveling to the four quarters of the world and, returning to the place where he started, really knowing it for the first time. But in Shahaf’s case, he already understands us pretty well. Thanks Shahaf, and bon voyage!

The post The Best Blog Post About Redfin appeared first on Redfin Real Estate Blog.