Today, Redfin’s stock begins trading on the public markets. We’re grateful to all the people of Redfin, past and present, who worked so hard and cared so much about this company. We’re grateful to our customers for taking a chance on us. And we’re grateful to our investors for supporting what we believe can be a great and enduring company. Below is the letter that the management team wrote for our prospectus.
And here are a few pictures to remember our roadshow adventure by:
This prospectus will tell you what we do: our company runs a website to show people homes for sale, and employs our own real estate agents to help people buy or sell those homes. This letter tries to explain who we are.
We think of ourselves as idealists, who got into this business to make real estate better for consumers, not just ourselves. Our ideals are important when we want to earn customers’ trust: to take our advice about walking away from an easy sale on the wrong house or about paying more in a bidding war. At a time when our customers are hauling everything they own across the country to start a new family, a new job, a new life, what they most need us to be is completely on their side.
And this is our mission, in a sales-mad, baloney-gorged world, to be the truth-teller, the fee-squeezer, the game-changer. Our idealism may not benefit stockholders over months or quarters, but we believe that over years and decades it will deliver the best results.
Of course idealists often get punched in the nose by the real world. But we’re also fighters. A long time ago, when we were competing against giants in markets where homes had lost half their value, a journalist described us as rabid squirrels.
We embraced this identity. It gave us the pluck to go after big markets with an unreasonably small number of people and resources, a mentality that is essential to creating stockholder value. This tenacity has been a good complement to the almost fevered idealism on which Redfin was founded, letting us ignore present-day pain for long-term gain. Rabid squirrels don’t give up.
We invented a map-based search website for Seattle, then let media companies launch that idea nationwide while we spent a decade figuring out how to run our own real estate brokerage market by market. Now we’re the United States’ fastest-growing major real estate site and, we believe, the best real estate service. That pairing has let us make the whole process of buying or selling a home better, not just the initial search. It has opened up the $75-billion market for residential real estate brokerages, not just their ad budgets. It has been worth the wait.
This long-term, holistic perspective has led to thousands of tweaks to our online tools so we can meet more customers, but then to months and even years of testing each tweak to see which of those customers actually buy a house. What has been beaten into us at every turn is a wary preference for durable gains in gross profit and customer value over pops in unprofitable growth.
But being a rabid squirrel is more than just frugality or patience. When we can convince more than 2,000 employees that we’re more willing to do hard things than our competitors, it is a fearsome advantage. This conviction makes us grind on details most would let go. It gives us the confidence to pursue mortgage, title and other businesses that aren’t for the faint of heart. It reminds us that the only way to make money over time is to do things others can’t or won’t.
The result has been a contrarian culture. In an age when the technology economy is increasingly divided from the rest of the world, we have hired our own real estate agents, not as a disposable labor force, but as partners in this business, with a salary, health-care benefits and the opportunity to earn stock options.
We employ people from all walks of life. We write software and analyze financial results like other technology companies; we also scoop kitty litter and squirm through crawl spaces looking for rats. Our engineers have said that when a problem with our software affects our agents, it feels like we have failed a friend. Our favorite saying at Redfin is that everyone sweeps the floors.
This humility is essential to our risk-taking culture. Everyone at Redfin knows our executives have made the lion’s share of our mistakes. None of us pretends we’re Steve Jobs. Since the cost of a mistake in business is often a hundred or a thousand times smaller than the gain from a new idea, we believe the fault lies mostly in the “not-done, the diffidence that faltered.” When we admit our mistakes as executives, it liberates everyone else here to think big and fearlessly, but also to concede their own mistakes quickly so we can limit losses, learn what went wrong, and move on to the next idea. We believe this increases our overall capacity to delight customers and create stockholder value.
So this is Redfin: rabid squirrels on a mission to make real estate better, and to treat everyone we work with along the way respectfully. Since we’re in real estate, we know there will be ups and downs. But we also know that when you work very hard for a long time to make things better for people, you usually create something meaningful, durable and good. We hope you see Redfin the same way. Thank you to our families and friends for supporting us in this effort.
Glenn, Scott, Adam, Bridget, Chris, Anthony