Weird experience calling RE office

I believe Redfin's financials other than revenue's are not publicly available. But I am in the pacific northwest, and generally us investors here are a small group unlike investors in silicon valley and know each other/help each other. The perception is that they have "healthy numbers". Another company I was looking at had decreasing annual revenue rate of like 11 percent. This company, in the last 4 years had decreasing rates like -4, -28, -13, and last year it was +3, so an average of -11 percent. So, like the exact opposite of Redfin, which is believed to have an increase in revenue run rate every year since 2009. The word in our circles was that they have come a long way since 2006. I'm not sure if you know the history of Redfin/Zillow and Trulia, but in 2004-2006 these three companies had their origins in Seattle. Redfin just could not get the funding that Zillow and Trulia got and they were struggling just to keep their business alive in 2006. So just being desperate to get vc funding in 2006 to investors lining up in 2014 so that invest and cash out when they go public is quite a turn around.

If I was an investor, my concern with redfin would be that every brokerage is going to rip them off and do exactly what they do in the near future, but also have way more experience and human capital.

Oh, its already happened, you have had brokerages shamelessly asking developers to build a "redfin clone". http://seattlebubble.com/blog/2014/03/04/sleazy-kirkland-brokerage-rips-off-redfin-design-and-code/

But, you know what, you must be doing something right if you have people copying you, thats validation right there. But the thing is, as I have mentioned before, Redfin has a "secret sauce", thats just make them unique. I just cannot nail what their secret sauce is. I believe it has to do with their founders being tech guys and brokers. They are just so far ahead of other brokerages when it comes to tech that its just absurd. So, other brokerages have a long way to go.

Forget brokerages, look at Zillow, they are not a broker, but they are a tech/media company. You would think with all this money, tech talent they have they will provide a better product than Redfin that will bring in customers. Not even close, they are relying on an absurd marketing budget to bring in visitors. Take a look at two exact listings in Zillow vs Redfin.

zillow- http://www.zillow.com/homedetails/145-Port-Irvine-CA-92618/2104614416_zpid/

redfin- https://www.redfin.com/CA/Irvine/145-Port-92618/home/57192556

It has the same information, same property info, same school, neighborhood info, same price history info, but just for some reason just Redfin's website looks better. Not sure exactly what it its, may be it just has more data, or the layout is easier on the eyes, whatever it is, thats their "secret sauce". Here you have Zillow, the most popular real estate website in the country, and with 45 million vistors a month cannot create a better product than Redfin who just does not have the same money to spend on acquiring talent/advertising, its mind boggling. So, if anything is going to save Redfin in the long run, it will be that secret sauce that they seem to have.

Zillow/Trulia/Realtor.com/Redfin can all be replaced in a blink of an eye.

not sure what they will be replaced by? They all have pretty unique roles. Zillow and Trulia bring in combined 90 million unique visitors a month and a media companies. Same with Realtor.com. Redfin, on the other hand is a brokerage, that just happens to have a strong digital presence like Z/T/R due to their technology. Not sure all three of them can be replaced in a blink of an eye. Even if thats going to happen, say there is some start up in Silicon Valley planning right now is planning to disrupt the real estate market, its not going to happen in a blink of an eye and in the mean time, you will have companies like Zillow and Redfin innovating too. If they are not innovating, tweaking things, making changes, then they deserve to be replaced.

I think at the end of the day though, they are just prospecting slightly differently. Everyone prospects

Everyone does, but I am just enamored by this model where the brokerage takes over the prospecting and the agents do exclusively the serving clients role. I am enamored because its a little different from the traditional model.

As soon as their tech advantage is copied, you will be right back to everyone paying to acquire customers and they will have to do the same or be left behind

Agreed, they have to keep innovating, but dont forget the Redfin "secret sauce" though. You cannot just attribute that to their technology or whatever, you already see brokerages trying to replicate or emulate their tech or their business model, but Im, just not sure what it is that just makes Redfin better in my opinion. So, for others to truly replicate Redfin, they have to find out what their secret sauce is. Thats the golden ticket.

/r/RealEstate Thread Parent